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LAGOS, March 12 (Reuters) - Market fundamentals do not
support a devaluation of Nigeria's naira currency at this time,
the central bank said in a statement on Thursday.
The currency in Africa's top oil producing country, which
relies on crude sales for 90% of foreign exchange earnings, has
come under pressure after oil prices plunged over the weekend
following a disagreement between Russia and Saudi Arabia over a
deeper production cut. The coronavirus outbreak has also hit
global demand for oil.
Nigerian stocks have sunk to a more than four-year low in
the last few days, while bond yield spreads widened as jittery
investors fret over the possibility of naira devaluation. JP
Morgan said on Wednesday it expected the naria to be devalued by
around 10% to 400 naira per dollar by the end of
June. "Market fundamentals do not support naira devaluation at
this time," the central bank said in a statement circulated late
on Thursday.
"The size of Nigeria's foreign exchange reserves remains
robust and comfortable," it said, adding that the bank "remains
able and willing to meet all genuine demand for foreign exchange
for legitimate transactions".
The bank, in its statement, said the coronavirus outbreak
that began in China and spread to other countries had reduced
the inflow of dollars into Nigeria.
The finance ministry on Monday said the country will cut the
size of its record 10.6 trillion naira ($34.6 billion) budget
for 2020 due to low oil prices. The spending plan was calculated
assuming a price of $57 per barrel, but Brent crude LCOc1 has
hovered around $33 a barrel in recent days.