CBN Clarifies Role In Forex Market as Naira Crashes To N1,660/$1
- CBN Governor Olayemi Cardoso has clarified its role in the foreign exchange markets as the naira continues to fall
- Cardoso stressed that the market is fully deregulated, and economic fundamentals determine the exchange rate
- The naira is struggling in both the official and foreign exchange markets, but CBN believes the future is bright
Olayemi Cardoso, the governor of the Central Bank of Nigeria (CBN), has clarified that the apex bank does not determine the country’s exchange rate, saying it is based on prevailing economic fundamentals.
Cardoso disclosed this while speaking as a panellist at the launch of the Nigeria Development Update in Abuja.
Source: Getty Images
Cardoso emphasized his commitment to central banking principles, stating:
"The CBN does not determine the exchange rate; the fundamentals determine it. The CBN will ensure that we adhere to that.”
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During his address, the CBN governor expressed optimism about strengthening Nigeria’s foreign exchange stability through closer collaboration with fiscal authorities, Vanguard reports.
His words:
"We are confident that working together with the fiscal side of the economy will bring more stability to the exchange rate."
This response comes amidst rising scrutiny over the free fall of the naira in the foreign exchange markets.
Official market data from FMDQ Securities shows that the naira is trading against the US dollar at N1,660.49, while in the black market, it has remained at an exchange rate of N1,700.
CBN dollar inflow
In his speech, Cardoso further highlighted efforts to boost foreign exchange inflows, which he said have significantly improved under his leadership.
His words:
“When we started, FX inflows were about $200 million, but through sheer determination, we now record $600 million."
He also believes that the reforms taken under his leadership have helped in the resurgence of investor confidence in the Nigerian economy.
He added:
“Before, many potential investors were on the sidelines. Now, it’s amazing to see how many have stepped forward to invest in Nigeria.”
There is hope for naira
Legit.ng earlier reported that the US Federal Reserve has decided to lower interest rates, and this will weaken the United States dollar.
The decision has provided an opportunity for the Nigerian currency to strengthen in the foreign exchange market.
Economists say that the US Federal Reserve's decision will also help attract more investment into Nigeria and help Naira perform better.
The Central Bank of Nigeria Monetary Policy Meeting (MPC) will sit on Monday, September 23, and Tuesday, September 24.
Proofreading by Nkem Ikeke, journalist and copy editor at Legit.ng.
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Source: Legit.ng
