As election delay continues to weigh on investors’ confidence, Godwin Emefiele, governor Central Bank of Nigeria (CBN), at the Nigerian Stock Exchange (NSE) yesterday said “no need to panic”.
Investors have been fretting about political instability in Nigeria – with negative im- pact on Nigeria’s financial markets. The Nigerian stock market headed for fourth straight loss this week following yesterday’s 2.73 percent declined which pushed the Year-to-Date (YtD) return further down at -19.39 percent. Thirty- seven stocks lost while only five gained.
The Nigerian Stock Exchange All Share Index (ASI) closed at 27,935.77 points against the preceding day level of 28,721.27 points, while market capitalisation closed at N9.321trn against preceding day close of N9.583trn. Volume traded increased by 21.24 percent from 339.45 million to 411.564 million, while the total value of stock traded decreased by 26.58 percent from N6.11bn to N4.48bn in 3,491 deals.
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“The Nigerian monetary authorities as well as fiscal authorities are doing everything they can to respond to those vulnerabilities. I repeat that there is no need for us to panic because we have looked at various scenarios and models where we look at some of those actions that the monetary and fiscal authorities would kick in as we attain various levels in the price of crude,” the CBN governor said on the trading floor of the Exchange. He went further saying, “I think it is important for me to at least commend the fiscal authorities.
In 2014, for instance, as these unfolding events started, the Minister of Finance invited the McKenzie Group to look at our non- oil sources of revenue. “In 2014, we had over N75bn in increased non-
oil revenues. We are expecting in 2015 that this will ramp up to as high as $1bn. Those are some of the activities that have been put in place. There is no need to panic. We have seen people also responding as a result of the political situation in Nigeria and all I can say is that the Nigerian economy remains resilient.” Also, Nigeria’s central bank chief said there was “no need to panic” over the slide of the currency, after figures showed the bank had spent over $110 million a day over nine recent trading sessions in a vain attempt to defend it. The naira has crashed through the key level of 200 to the dollar this week in a rout sparked by weak oil prices and escalating tension over the postponement of a presidential election.
Emefiele said the currency was “appropriately priced” despite a nearly 25 percent slide against the dollar in the last three months, and investors should stay calm. “We are not in the best of times but there’s no need to panic,” Emefiele told CNBC Africa in an interview. He said the bank’s Monetary Policy Committee did not need to hold an emergency meeting, and ruled out a float of the currency. In the latest update on its reserves, the Central Bank of Nigeria (CBN) said on Thursday its stockpile of dollars had dropped to $33.4bn as of February 10, a decline of $1bn since January 28.
