In a bid to address growing concerns over Nigeria's foreign reserves and the performance of the Naira, Olayemi Cardoso, Governor of the Central Bank of Nigeria (CBN), offered insights during the ongoing Spring Meetings of the International Monetary Fund (IMF) and the World Bank.
Cardoso debunked speculations that the CBN was actively strengthening the Naira using the country's foreign reserves. Instead, he emphasized that the Naira is performing independently in the foreign exchange market, driven by principles of willing buyers and willing sellers.
Addressing the depletion of foreign reserves, Cardoso attributed it to the settlement of the country's obligations rather than a deliberate attempt to defend the Naira. He clarified that maintaining foreign reserves is primarily for meeting financial commitments and not for currency defense purposes.
Furthermore, Cardoso highlighted the cooperation between the CBN and fiscal authorities, stating that issues such as food inflation and Ways and Means financing are being addressed collaboratively. He underscored the importance of effective communication to manage public expectations and foster confidence in the Nigerian currency.
The Governor outlined recent monetary policy measures, including a significant increase in the monetary policy rate, aimed at stabilizing the economy and moderating inflation. Despite facing initial challenges, Cardoso noted positive outcomes, with the Naira transitioning from the worst-performing currency to the best-performing currency globally within a short period.
Looking ahead, Cardoso emphasized the CBN's commitment to transparency and effective communication to ensure realistic expectations among Nigerians and stakeholders. He reiterated the ultimate goal of moderating inflation and strengthening the Nigerian economy.
