“N1,500 Per Dollar”: CBN Governor Sends Message to Nigerians over Naira Depreciation, Makes Promises
- The governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has promised that the worst days of the naira are over
- He disclosed in an interview that the naira has remained relatively stable due to reforms of the apex bank
- Cardoso’s statements came as the naira crashed to its lowest in the official market on Tuesday, June 25, 2024, trading at N1,507.79 to a dollar
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment, and the economy for over a decade.
The governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has expressed pleasure about the relative stability of the Naira in the past months.
The CBN boss disclosed in an interview with Bloomberg TV on Tuesday, June 25, 2024, that the naira volatility will not resurface again.
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Naira maintains stability in June
He said:
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“I do believe that we have more or less seen the worst in terms of volatility.”
“We are also very alive to observing the way and manner in which the market operates and ensuring that it gives the best value that can be accomplished using certain tools.”
According to Cardoso, the apex bank's various interventions calmed the Naira’s volatility while stating that Nigeria’s Monetary Policy Committee (MPC) would do everything possible to stem inflation.
The Nigerian currency had remained relatively stable in June, trading between N1,473 and N1,485 per dollar in the official market, before crashing on Tuesday, June 25, 2024.
The relative moderation of the naira appeared to be a win for the reforms initiated by Bola Tinubu’s government and a positive sign for the apex bank's interventions.
Reports say the financial institutions regulator increased the key interest rate to 26.25% to attract dollar inflows to end volatility and curb inflation, which spiked to 33.95% in May.
Nigeria witnesses FX inflows into economy
Financial experts believe that the relative stability of the Naira was due to inflows to the Nigerian economy.
Legit.ng earlier reported that about $5.95 billion from the World Bank and Afreximbank entered the economy, boosting the country’s external reserves and strengthening Naira’s value.
Naira crashes as Customs make promises
CBN data reveals that the FX inflow saw the country’s FX reserves rising to $33.58 billion as of June 19, 2024.
Meanwhile, the Naira crashed to its lowest since May 2024 on Tuesday, June 25, 2024, trading at N1,500.75 per dollar in the official market as against the N1,488.06 it traded the day before.
Currency traders quoted the spot rate at a high of N1,507 per and a low of N1,426.
Data from the FMDQ Exchange shows that Forex turnover improved relatively at $136.75 million.
This development comes as the Nigerian Customs Service (NCS) said it is collaborating with the CBN to establish a stable FX rate for import duties.
The Customs forex rate for import duty has also been stable for a while.
Currency dealers, banks, and others sell dollars at new rates
Legit.ng previously reported that the Nigerian currency depreciated in the official market after the holidays as the scramble for the dollar increased.
Analysts point to the resumption of business activities as the reason for the increased dollar demand, stating that most businesses and importers already placed requisitions for the US greenback before the holidays.
The naira traded slightly low in the official foreign exchange market at N1,483 to the dollar on Wednesday, June 19, 2024, compared to the N1,473 it traded on Friday, June 14, 2024.
Proofread by Kola Muhammed, journalist and copyeditor at Legit.ng
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