By Adedapo Adesanya
The Governor of the Central Bank of Nigeria (CBN), Mr Olayemi Cardoso, has called for moderation in demand for foreign exchange (FX) so the market can get on a path of stability.
He made this appeal when he alongside members of the country’s economic team, including the Minister of Finance, Mr Wale Edun, and the Minister of Agriculture, Mr Abubakar Kyari, met with the Nigerian Senate on Friday.
“We must as a country moderate our demand for foreign exchange to make the market better,” he said, adding that there was so much that the apex bank could do.
He said the core mandate of the CBN was to fix the supply side of the market, but this alone would not help alleviate the problem associated with demand as it was only working from one side.
The CBN chief said on addressing the supply side, “It has kept us in a narrow bucket. We have seen a shift to a market-oriented approach and in the short term, we are addressing the volumes and through some short-term efforts, we are managing hoarding and speculation.”
He called that to make a shift in terms of demand, Nigerians can make do with local substitution in instances of importation, medical tourism, and education.
“We found that the quantum of these demands was more than our reserves,” he said to the lawmakers.
Mr Cardoso also said the CBN would stick to its duty as a monetary policy authority and would lay off certain non-banking efforts including agriculture, arts, and other interventionist approaches taken by his successor, Mr Godwin Emefiele.
“We don’t have the capacity as CBN to engage in interventions. We will help those that have the capacity. We will partner as opposed to have direct intervention,” he stated.
The central banker added that the the CBN was working on reinventing its credibility, to reshape the mindset around the national lender and its impact on the economy.
“We are working hard to bring back credibility to the country. For people to invest, they (investors) must believe that what you say is the right thing,” he disclosed, noting that to boost this credibility, there have been certain steps that it has taken over the last week, including the recent audit carried out by Deloitte consultancy to expose infractions in the FX market.
The banker also called for increased collaboration between the CBN and the fiscal authorities, alluding that the latest collaboration with the Nigerian National Petroleum Company (NNPC) was a sign of what was to come.
“We will continue our functions as advisors to the government and we are right now trying to strengthen our collaboration,” Mr Cardoso said.
