The newly appointed Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has outlined his immediate priorities during a Senate screening session, promising to address the apex bank’s backlog of unsettled foreign exchange obligations and combat rising inflation through evidence-based monetary policies.
Cardoso emphasized the need to prioritize clearing the CBN’s backlog of unsettled foreign exchange obligations, acknowledging that this issue is critical to the stability of the foreign exchange market. He stressed the importance of transparency and clear rules in the market to attract foreign investors and portfolio investors, thereby bolstering confidence and attracting capital inflows.
Addressing the naira’s recent decline and instability, Cardoso expressed his commitment to stabilizing the national currency by settling existing financial obligations and establishing transparent rules for market participants. He emphasized the importance of verifying the authenticity and extent of these obligations to ensure an effective resolution.
The CBN governor also pledged to enhance transparency, improve corporate governance, and instill confidence in the autonomy and integrity of the central bank. He emphasized the need to maintain price stability and revert to evidence-based monetary policies, discontinuing unorthodox measures implemented by his predecessor to strengthen the country’s currency, the naira.
Nigeria has been grappling with economic challenges, including a weakening naira, as it approaches an exchange rate of 1,000 naira per US dollar in the parallel market. The official market closed with a naira-to-dollar exchange rate of N755.08/$1 on Tuesday, according to data from the FMDQ Exchange.
In addressing the country’s inflation woes, which surged to 25.80 percent in August 2023, Cardoso pledged to implement evidence-based monetary policies and emphasized the importance of accurate data for informed decision-making. He noted that money supply and deficit financing have contributed significantly to inflation over the past decade, calling it a critical issue that requires immediate attention.
Cardoso’s appointment comes at a crucial time for Nigeria’s economy, and his commitment to addressing forex obligations and inflation provides hope for stability and growth in the country’s financial sector. As he takes the helm at the CBN, Nigerians will be watching closely to see how his policies and actions shape the nation’s economic trajectory in the coming months.