In his bid to stabilize Nigeria’s foreign exchange market, newly appointed Central Bank Governor, Olayemi Cardoso, has committed to addressing the backlog of unsettled foreign exchange obligations held by the apex bank.
Cardoso outlined his objectives during a Senate screening session, emphasizing the need for transparency, improved corporate governance, and restored confidence in the bank’s autonomy and integrity.
Naira nears N1,000/$1
The naira has faced significant challenges, with its value nearing N1,000 to the dollar in the parallel market.
The official market closed with the naira-to-dollar exchange rate at N755.08/$1 on Tuesday.
To stabilize the naira, Cardoso’s immediate plan involves settling existing financial obligations and establishing transparent rules in the foreign exchange market.
Cardoso stated, ‘Right now, we have a situation where we are aware that there are unsettled obligations by the CBN.
Whether it is $4 billion, $5 billion, or $7 billion, I don’t know, but definitely the immediate priority will be to verify the authenticity and extent of what is owed.
Number two, apart from the operational issue, there is one that is system-related that involves ensuring that we come up with rules that are open and transparent for all market participants to understand.’
To combat inflation, Cardoso intends to implement evidence-based monetary policies.
He stressed the importance of data gathering capacity to make informed decisions and address the country’s inflationary challenges, which surged to 25.80% in August 2023.
The CBN started its monetary policy tightening cycle in May 2022, raising the benchmark interest rate to 18.75% in July.
Cardoso acknowledged that deficit financing had contributed to inflation and pledged to tackle money supply issues effectively.