The Central Bank of Nigeria (CBN)’s director of monetary policy, Hassan Mahmud, has suggested that the institution is not worried about the naira’s valuation but is instead interested in “boosting dollar supply on the currency market.”
According to a report, Mahmud’s remarks were made just a day after the local currency touched a new low of 532 naira for one dollar on the parallel market. This new parallel market exchange rate differs significantly from the CBN’s current spot exchange rate of approximately 411 naira to the dollar.
Yet, in spite of the glaring differences between the two rates, Mahmud, who was addressing a virtual investor conference, insisted that fixing this gap is not the priority of the central bank. Mahmud explained:
We are not really bothered much about valuation. What we are worried about is the supply side and the confidence in the system.
Since the second quarter of 2020, Nigeria has grappled with