In an exclusive interview with Arise Television, the Governor of the Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso, emphasized that the naira is currently undervalued. He expressed confidence that coordinated measures on the fiscal side, coupled with ongoing efforts, would contribute to genuine price discovery, fostering a more balanced and stable exchange rate in the near term.
Addressing concerns over outstanding Foreign Exchange (FX) liabilities, Cardoso stated that the CBN is actively pursuing a comprehensive strategy to improve FX market liquidity across short, medium, and long-term horizons. He emphasized the need for a coordinated approach, indicating that the bank would not pay for FX requests that are not validly constituted. Authorized dealers have been contacted to provide explanations for identified disparities.
Contrary to speculation, Cardoso clarified that he holds no opposition to central bank interventions in the economy, considering it a standard practice globally, especially during crises. However, he stressed the importance of well-thought-out interventions to avoid destabilizing the economy. He noted that excessive liquidity injected into the economy within a short timeframe, accounting for approximately 25% of loans and advances in the N40 trillion economy, has led to distortions, including inflation.
Cardoso highlighted that the CBN lacks the capacity for direct interventions and is committed to focusing on its primary mandate: controlling inflation, stabilizing prices, and ensuring a stable economic environment. He affirmed the CBN’s intention to collaborate with entities possessing the capacity to manage interventions effectively, preventing mismanagement of funds and ensuring desired outcomes.
Denying rumors, Cardoso dismissed claims of the federal government planning to convert domiciliary accounts of Nigerians to naira accounts as part of reforms to stabilize the local currency. He concluded by discussing the forensic audit conducted by Deloitte Management Consultant on outstanding FX obligations, emphasizing the commitment to paying all valid transactions based on the audit results.
