Currency Hoarders To Lose Big as CBN Governor Unveils Plans To Crash Dollar at Forex Markets
- The Central Bank of Nigeria Governor Olayemi Cardoso has reacted to the free fall of the Naira in the foreign exchange markets
- CBN governor Cardoso expressed the belief that the Naira is undervalued and outlined measures to stabilise the exchange rate
- The Naira, against the US dollar, is exchanged above N1,300 in the unofficial market and at N882.24 in the official market
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Legit.ng journalist Dave Ibemere has over a decade of experience covering Tech, Energy, Stocks, Investments, and the Economy
The governor of the Central Bank of Nigeria, Olayemi Cardoso, has announced plans to stabilise the naira exchange rate in foreign exchange markets.
Speaking at the Launch of the Nigerian Economic Summit Group (NESG) 2024 Macroeconomic Outlook Report, Cardoso expressed the belief that the Naira is currently “undervalued”.
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The value of the Naira has continued to plummet at both official and parallel ends of the market, with the currency trading as low as N1,330 to the dollar at the Nigeria Autonomous Foreign Exchange (NAFEX) window while it sells on the streets at N1,365 to the dollar.
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CBN governor speaks on naira plans
Reacting to the current exchange rate, the CBN governor said work is ongoing for price discovery for naira.
His words:
"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."
Cardoso also revealed that the apex bank is collaborating with the Ministry of Finance and the NNPC to ensure that all forex inflows are returned to the central bank.
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He added that the CBN is committed to clearing the foreign exchange backlogs and will decisively deal with any abuse of the process by anyone.
He said:
"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."
The CBN has always believed the actual exchange rate of the naira is around N750-N755 per dollar.
Economist sets new exchange rate
Earlier, Legit.ng reported that the Economist Intelligence Unit (EIU), a research and analysis firm, predicted that the Naira would close in 2023 with an exchange rate of N848/$ in the official market.
The EIU also said by the end of the following year (2024), the Naira would be exchanged at N861.5 for a US dollar.
Similarly, the EIU predicted that the pressure on the Naira would ease in 2024 without CBN implementing harsh measures.
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Source: Legit.ng
