Olayemi Cardoso, the governor of the Central Bank of Nigeria (CBN), has said that the bank’s severe reforms would ultimately stabilise the naira and the economy.
This was said by Cardoso in a Monday interview with Arise TV, which Daily Trust saw. Cardoso claimed that the bank has implemented crucial measures to support the naira, which had been depreciating against the dollar.
“It’s crucial to acknowledge that there has been a lack of liquidity in the foreign exchange market due to specific distortions in the recent past, which has consequently led to market volatility,” he said.After considering this for a few weeks, we developed a few rules aimed at fostering conditions that would restore market liquidity and make the market seem livelier than it was before.
The governor of the top bank went on to say that investors’ trust was being bolstered by the Nigerian National Petroleum Company Ltd.’s (NNPCL) decision to relocate its accounts to the CBN.
Cardoso said, “It also sends a very powerful signal to the confidence that NNPCL and some of the MDAs moved their funding straight to the central bank.”Nigeria is moving in the path that a lot of investors would want to see it go. Volatility starts to go down when people’s money starts flowing in and their confidence returns, which is what I see occurring.
I firmly think that the volatility will decrease and the foreign currency market will stabilise. The large swings you have been seeing in it are starting to lessen.A large number of overseas portfolio investors are keen to return to the Nigerian market. It’s amazing, and if anybody has shown interest, it’s the foreign portfolio investors—let me state that very firmly.
Overcrowding at the CBN Office
Cardoso spoke about the problem of too many people at the CBN headquarters. He said that the internal structures of the central bank were being rearranged for administrative efficiency and ease. It is thought that this rearrangement is required to improve overall operating efficiency and alleviate the issues brought on by overpopulation.
Meeting of the Monetary Policy Committee (MPC)
Governor Cardoso said that he is focused on making sure the MPC has an effect and supports the fiscal side of the economy. The MPC is scheduled to take place this month. He said that the MPC’s course is in line with the CBN’s redoubled emphasis on stabilising prices and reducing inflation, which reflects the central bank’s new focus and fundamental mission.
In his remarks, Governor Cardoso recognised the importance of interventions in Nigeria and emphasised their ability to direct resources towards people in need. To guarantee that these initiatives reach the intended beneficiaries, he did, however, underscore the need of establishing an appropriate framework. The CBN intends to concentrate on its core competencies while closely partnering with organisations that possess intervention space knowledge. By using this strategy, the risks associated with ineffective treatments are avoided, and resources are directed towards the appropriate recipients.
Foreign Exchange Liquidity and NNPC
As a step in the right direction and one that would inspire trust, Governor Cardoso emphasised the recent decision to transfer financing from the NNPC and other government agencies to the Central Bank of Nigeria (CBN).
External observers consider this action to be a major step forward. It is anticipated to boost foreign currency inflow and provide a more transparent market structure. Through these changes, the CBN hopes to improve economic stability and fortify the financial system as a whole by incorporating significant state-owned companies like the NNPC.