Emefiele warns domestic and foreign investors against patronising unofficial market as Naira hits new low

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    LAGOS, May 21 – Nigeria’s central bank governor is warning against the use of black markets for foreign currency exchange after a coronavirus-induced oil price crash caused dollar shortages for Africa’s biggest economy, in a video seen by Naija247news

    Governor Godwin Emefiele warned domestic and foreign investors against patronising the unofficial market, saying it was helping to overheat that market.

    The central bank was not immediately available for comment on the video.

    The naira has hit a series of lows on the black market widening the gap with the official and over-the-counter spot markets, especially after dollar sales were suspended due to a coronavirus lockdown in April and a 15% devaluation in March.

    Dollar sales have since resumed following a phased easing of the lockdown but foreign investor currency demand is yet to be met, analysts say.

    “Don’t go there it is not good for you,” Emefiele told investors on the call referring to the black market. The date on the computer screen is May 18 2020.

    “You would lose money because you would have bought at a price that is not realistic,” he said.

    Dollar demand has been swelling and piling up pressure on the naira. Importers with past due obligations have scrambled for hard currency while providers of foreign exchange, such as offshore investors, have exited.

    The oil price crash has exacerbated a shortage of dollars for Nigeria, whose reserve has declined 21% to $35.5 billion over the last year.

    In May, the bank weakened the naira on the derivative futures market, signalling more pain to come for the currency.

    Emefiele in the video urged investors to be patient, saying that dollar demand would be met in an orderly manner.

    Analysts estimate there is pent up demand between $1.5 billion and $1.8 billion from investors looking to exit Nigeria, whose economy is forecast to shrink by 3.4% this year.

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    Samson Gbenga Salau [Editorial Board Adviser] Gbenga Samuel Salau is a professional journalist with over 17 years experience in journalism, he is a graduate of Communication and Language Arts, University of Ibadan. On completion of his youth service, he joined The Guardian as a freelance journalist and was later absorbed as a staff. While in the University, he was a campus journalist reporting for the Independence Hall and Faculty of Arts Press Clubs. As a campus journalist, he won the following awards; Independence Hall Press Best News writer; University of Ibadan Union of Campus Journalists’ Best News Reporter/Writer; First Runner-up, Reuben Abati Award for Investigative Journalism; Association of Faculty of Arts Students’ Press Best Reporter; University of Ibadan Union of Campus Journalists’ Best Political Writer; Winner, Reuben Abati Award for Investigative Journalism, and University of Ibadan Union of Campus Journalists’ Best Interviewer. He served the Association of Communication and Language Arts Students, as the Public Relation Officer, the same year he was appointed the News Editor of the Association of Faculty of Arts Students Press. The following session, he was made the General Editor, and a member of the 13-man University of Ibadan Students’ Union Transition Committee. As a reporter in The Guardian, in 2014, he won the Promasidor Quill Award Best Report on Nutrition and DAME Business Reporting category. In the 2015 edition of the Promasidor Quill Award, he won the best Report on Nutrition and Brand Advocate Categories, while in 2016, he won the NMMA Print Journalist of the Year, first runner-up Golden Pen Reporter of the Year and SERAs CSR Awards. Gbenga Salau loves traveling, reading, and listening to songs with good lyrics no matter the genre.

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