Nigerian naira has lost 85% of its value — CBN

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The Central Bank of Nigeria has reported that the naira has lost about 85% of its value within the last two years.

The CBN said the shed in value may affect banks more as the apex bank advised banks to monitor financial risks.

The Director, Banking and Payment System, CBN, Mrs. Tokunbo Martins, made the disclosure  some days ago.

Mrs. Tokunbo said Nigerian the banking sector was facing various kinds of risks.

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She said the risk is occasioned by high inflation, naira depreciation, oil price crash and decline in manufacturing output.

She therefore urged risk managers to rise to the task of maintaining robust risk management practice in the banking sector.

“There is a need to avoid the situation the world experienced during the global financial crisis.

“Banks should curb risks through the use of regulations and standards.

“During the global financial crisis, risk managers got significant amount of the blame.

“The nation’s Gross Domestic Product has contracted by 2.2% and inflation has gone up to above 18%.

“The currency has depreciated by about 85% in the past two years, and manufacturing has contracted by three%.”

Mrs. Tokunbo who doubles as a member of the Board of Trustees of RIMAN, added, “The oil that we produce, apart from the price, has fallen by about 70%.

“The volume has also contracted a great deal and banks are exposed to manufacturing, oil and gas, and to the government.

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“The government’s revenue has declined. Non-performing loans have increased.

“We do have a very cocktail of risks in our hands. What is the future of risk management?

“It is more and more regulation and standards,” Mrs. Tokunbo warned.

Recall that the President had submitted a budget proposal to the Senate which pegged inflation at 4.6%.

Mrs. Tokunbo’s statement sharply contradicts that of the president.