The Central Bank of Nigeria (CBN) has explained that COVID-19, shortage in foreign exchange supply and other factors were responsible for the sharp devaluation of the Naira.
CBN Deputy Governor, Corporate Services, Edward Adamu disclosed this while responding to questions from members of the House of Representatives Committee on Finance during the 2022-2024 MTEF/FSP stakeholders interactive session on Monday.
“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 ground to a halt and the use of crude oil also was halted,” he said.
“You go on to foreign portfolio inflows, you notice that investors also settle their affairs on the side of caution and so once COVID-19 outbreak occurred, they moved out about $120bn from emerging markets to the safe haven in America and Nigeria is one of those countries the money was withdrawn from.
“On the remittances side, once our brothers and sisters abroad were not working because of the situation they found themselves in; they had very little to send to us here and so we also saw remittances reduced.”
He also said before the recent CBN policy on selling forex only through banks, CBN was giving Bureau De Change (BDCs) operators about $500 million monthly.