Don't Miss


Home   >   Business   >   Industries   >   Banking   >   Currency devaluation unlikely to impact on stocks – CBN

Currency devaluation unlikely to impact on stocks – CBN

By on March 15, 2015

The Central Bank of Nigeria (CBN) Deputy Governor, Financial System Stability, Dr. Joseph Nnanna on Thursday allayed fears that the recent devaluation of the naira could erode the profitability of  capital market investors.

Speaking to journalists in Abuja shortly after interacting with students of the Government Secondary School, Garki, to mark the 2015 School Mentoring Programme, which is part of activities for Global Money Week, the CBN deputy governor hinged his optimism on the fact that stocks listed on the Nigerian Stock Exchange are priced in naira and not in the United States dollar.

He said: “Our stocks are denominated in naira, they are priced in naira, our stock market can only be affected by the profitability of the companies which are quoted in the stock exchange.
“But so far, we don’t see any evidence that some of the companies quoted there, their profit margin or bottom line is declining. So that’s why I am saying that the stability of the Naira or otherwise won’t affect the price of the shares.”

Asked if the importation of raw materials would not be affected by fluctuation in the exchange rate, he said: “The point here is that we talk about costs, we don’t talk about returns. The companies that import things from abroad cannot continue to be in business if their returns on investment is not high enough.

“So breweries are local brands, the star beer you drink are produced with almost ninety-five per cent local materials, cement by Dangote has ninety-five percent local raw materials and many others. This economy has been diversified from what you see from the GDP. We have N510 billion GDP and services, manufacturing, agriculture now account for the greatest share.”

Meanwhile, Nnanna said the mentoring programme was to create financial literacy awareness among youths, with a view to preparing them for future challenges and help them imbibe a culture of saving.

He also expressed satisfaction with the level of response he got from the junior students.
According to him, “What we have just done is part of the Global Money Week and we have as a matter of fact, a means of monitoring and evaluation. These are junior secondary school who are proceeding to senior secondary school. Next year, we shall repeat this visit and continue to drum this awareness.”

“I must say that the kids here are well informed; as I was making my presentations, I was asking them questions and they are very aware of modern products in the money market-ATM, they know how to make deposits and I think I am impressed but again, what do you expect from city-kids-I told them that in my village, there are students of my age group who don’t know what an ATM is. And that’s true.”

 

[ThisDay]

2 Comments

  1. Dric

    March 16, 2015 at 8:50 pm

    Get the best interior design from http://www.thedric.com

  2. Omia Agbor Asuk

    March 17, 2015 at 7:20 am

    When will the exchange rate be naira and kobo. Omia.