Market fundamentals do not support a devaluation of Nigeria’s naira currency at this time, Central Bank of Nigeria (CBN) 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 has hovered around $33 a barrel in recent days.

Reuters