CBN explains the Depreciation of Naira against US Dollar

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The Central Bank of Nigeria (CBN) has explained the reason for a sharp depreciation of Naira against the United States Dollar.

Responding to questions from members of the House of Representatives Committee on Finance during the 2022-2024 MTEF/FSP stakeholders interactive session on Monday August 16, CBN Deputy Governor, Corporate Services, Edward Adamu blamed the depreciation on COVID-19 pandemic, shortage in foreign exchange supply and others.

Adamu who disclosed that COVID-19 pandemic had a devastating effect on the country’s economy and reduced the availability of foreign exchange, added that crude oil sales which is the major source of forex for the country, dropped drastically last year.

He said:

“We have proceeds from the sale of crude oil, we have foreign portfolio inflows and remittances; those are the three major ways that we get forex.

“Crude oil sale has not been as high as we all want it to be and obviously in the aftermath of COVID-19, the global economy was grounded to a halt and the use of crude oil also was reduced.

“Sometimes in April last year, we had crude oil selling at a negative money, which means that people were being paid to store what they bought and so avenue for forex inflows was significantly reduced.”