Mr. Olayemi Cardoso, the Governor of the Central Bank of Nigeria (CBN), has reaffirmed the commitment of the Bank’s Monetary Policy Committee (MPC) to control inflation using conventional methods. In an interview with Bloomberg in London, Cardoso provided insights into the current market conditions, focusing on the stability of the Naira and inflation rates.
Cardoso pointed out a positive development in the deceleration of month-on-month inflation rates, indicating that the MPC members are closely monitoring these trends to ensure inflation is kept under control. He stated, “MPC members will continue to monitor the trajectory and are determined to ensure that they put inflation under control.”
Addressing the volatility in the foreign exchange market, Cardoso expressed optimism about the recent stability and improvements in liquidity, which have helped restore confidence among market participants. He noted that the past panic and front-loading of requests have subsided due to increased liquidity in the market. “In the past, people were panicking and front-loading their requests. Now, a lot of that has calmed down. There’s no inclination to do that because liquidity has returned to the market,” he explained.
A significant achievement mentioned by Cardoso was the unification of previously disparate exchange rates into a more streamlined system. “We had two different rates; right now, we more or less have one rate. And we believe that this is good. It allows companies to plan,” he said, emphasizing the importance of a predictable exchange rate for economic planning and investment.
Cardoso expressed confidence in the current market dynamics, where willing buyers and sellers operate freely, contributing to the stability of the Naira. He stressed the need for continuous observation and management to ensure that the market benefits all participants. “We believe that this is good. It allows companies to plan,” he stated, emphasizing the importance of a predictable exchange rate for economic planning and investment.
Furthermore, Cardoso highlighted the crucial role of coordinated monetary and fiscal policies in achieving economic stability. He underscored the necessity of collaboration between these policies to manage the macroeconomic fundamentals influencing the market, aiming to provide the best value for the Naira.
In summary, the CBN Governor’s remarks reflect a cautious yet optimistic approach towards managing Nigeria’s economic challenges, with a focus on stabilizing the Naira, controlling inflation, and ensuring a stable and predictable market environment for businesses and investors.
