The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has announced proactive measures to stabilize the Naira exchange rate in the foreign exchange markets. Cardoso made this declaration during the launch of the Nigerian Economic Summit Group (NESG) 2024 Macroeconomic Outlook Report, where he expressed his belief that the Naira is currently undervalued.
The value of the Naira has been experiencing a decline, trading as low as N1,330 to the dollar at the Nigeria Autonomous Foreign Exchange (NAFEX) window, and selling on the streets at N1,365 to the dollar. In response to the current exchange rate challenges, the CBN governor stated that efforts are underway for price discovery for the Naira.
“We believe that the Naira is currently undervalued and, coupled with coordinated measures on the fiscal side, we will expedite genuine price discovery in the near term. This coordinated approach will contribute to a more balanced and stable exchange rate,” said Cardoso.
He also disclosed that the CBN is collaborating with the Ministry of Finance and the Nigerian National Petroleum Corporation (NNPC) to ensure that all forex inflows are returned to the central bank. Emphasizing the commitment to clearing foreign exchange backlogs, Cardoso affirmed that any abuse of the process would be decisively addressed.
“This coordinated effort will greatly enhance the Bank’s FX flows and contribute to the accretion of reserves. We will expedite genuine price discovery in the near term. We are implementing a comprehensive strategy to improve liquidity in our forex markets in the short, medium, and long term. Our focus is on addressing fundamental issues that have hindered the effective operation of our markets over the years,” added the CBN governor.
The CBN has consistently held the view that the actual exchange rate of the Naira is around N750-N755 per dollar. Additionally, the Economist Intelligence Unit (EIU) has predicted that the Naira will close in 2023 with an exchange rate of N848/$ in the official market, with a further projected exchange rate of N861.5 for a US dollar by the end of 2024.
In light of these challenges, the CBN remains committed to implementing strategic measures to enhance liquidity and address fundamental issues affecting the forex markets.
*Source: [Legit.ng](https://www.legit.ng/business-economy/money/1575292-cbn-governor-speaks-naira-exchange-rate-foreign-currenices-unveils-action/)*
