Olayemi Cardoso, governor of the Central Bank of Nigeria (CBN), says the apex bank is “relatively pleased” with the progress it has made in stabilising the naira.
Cardoso, who spoke in an interview with Bloomberg TV on
Tuesday, said he believes the excessive volatility may be a thing of the past.
He also said the financial regulator will continue to work
hard, adding that it is a work in progress.
“I do believe that we have more or less seen the worst in
terms of volatility,” Cardoso said.
“We are also very
alive to observing the way and manner in which that market operates and
ensuring that it gives the best value that can be accomplished using certain
tools.”
Cardoso further said reviving confidence in the naira is
crucial for Nigeria to lure investors.
“We’re relatively pleased with where we are,” Cardoso added.
He also said the central bank needs to do more, adding that
“it’s continuous work in progress”.
“And we will do everything possible to ensure that we
continue to manage the macroeconomic fundamentals that affect that,” he said.
Since the beginning of June, the naira has been trading in a
narrow range between N1,473 and N1,490 per dollar at the official market.
However, the naira fell to N1,500/$ on Tuesday – from N1,488
traded on June 24.
‘DATA TO DETERMINE CBN’S MPC STANCE ON
INFLATION’
The publication said as the annual inflation rate starts to
rise at a slower pace, Cardoso refused to be drawn on whether this could signal
the end of the tightening cycle that began in May 2022 — as CBN’s monetary
policy committee (MPC) prepares to meet in July.
CBN has been increasing interest rates since May 2022, with
the monetary policy rate (MPR) — which is the benchmark for banks’ lending rate
— reaching 26.25 percent in May this year.
In May, the inflation rate rose to 33.95 percent compared to
33.69 percent in April.
Cardoso said data will determine the stance of the MPC on inflation
movement.
“Data will direct whether they see further hikes or not,” he
said.
“The MPC has been
very clear in stating that they see inflation as a major impediment for the
future of Nigeria, and they will do everything possible to ensure that they
keep inflation in check and fact bring it down as reasonably as they can and I
don’t see that changing.”
He also said the apex bank’s steps and fiscal reforms
undertaken by President Bola Tinubu’s administration have assisted the nation
in securing much-needed liquidity.
The World Bank earlier this month approved $2.25 billion in
funding to support Nigeria’s economic reforms helping boost its foreign
exchange reserves.
The governor said CBN would support further measures to
build the country’s reserves including a eurobond issue.
“We should have a
diversity of sources,” he said.
Cardoso said it should not just be the eurobond market or
just be foreign portfolio investors, but it should be a variety of different
things.
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