The Governor of the Central Bank, (CBN), Yemi Cardoso, has said that the measures implemented by the apex bank to stabilise foreign exchange rates are showing positive outcomes.
Cardoso, in a briefing to the Joint Senate Committee on Finance, Banking, Insurance, and Financial Institutions, emphasised the crucial connection between stable foreign exchange rates and inflation, stating that the measures undertaken by the Central Bank would contribute to minimising the impact of high exchange rates on inflation. He highlighted the success of these initiatives, indicating that the positive results have already begun to manifest.
During the briefing, the CBN governor shared a significant development, stating that a substantial $1 billion has entered the Nigerian market in the past few days through interventions by the apex bank.
“We have already begun to see shifts in the positive direction. Indeed they (CBN measures) have already started yielding early results with significant interest from foreign portfolio investors which was a concern. That has already begun to supply the much-needed foreign exchange to the economy.
“For example, upward of the past few days, we have had over $1 billion that has come into the market, and this quite frankly has answered the question of if our policies are working,” Cardoso said
The CBN Chief asserted that the market’s response to implemented policies is positive, citing available data. He emphasised the potential of measures enhancing the US dollar supply in Nigeria to curb exchange rate volatility and, consequently, alleviate inflation.
Stressing the need for sustainability, he urged Nigeria to temper its demand for foreign exchange. While working towards restoring the Central Bank’s credibility, he pinpointed the fundamental issue: the substantial demand for US dollars for both business and personal purposes.
Addressing concerns, the CBN governor assured that inflation is anticipated to decrease to 21.1 percent this year, employing the inflation targeting framework.
The appearance before the Joint Senate Committee on January 31 was in response to pressing economic challenges and the notable decline of the naira in the foreign exchange market.
Senators, seeking explanations on the nation’s economic predicaments, summoned the Central Bank Governor, underscoring the urgency of addressing the prevailing economic uncertainties.
