Cardoso Insists Transparency in FX Market Needed for Stability, Fair Pricing

January 25, 2024
FX Backlog

By Adedapo Adesanya

The Governor of the Central Bank of Nigeria, Mr Olayemi Cardoso, has insisted that prioritising transparency in the Nigerian foreign exchange rate system is crucial for stability and fair determination of rates.

He made this disclosure at the launch of the Nigerian Economic Summit Group (NESG) 2024 Macroeconomic Outlook Report, on Wednesday.

According to a statement from the apex bank, the banker is optimistic about significant positive changes in the Nigerian economy.

He said the forex market reforms introduced last June aim to streamline and unify multiple exchange rates, foster transparency, and reduce arbitrage opportunities.

In his words, “We are implementing a comprehensive strategy to improve liquidity in our FX 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.”

He then reassured investors of stability as the country transitioned towards stability with some of the measures announced recently.

“Investors, both local and foreign, and other stakeholders, can rest assured that the economy will transition to a new state of stability in the short-to-medium term as we recalibrate our policy toolkits and implement far-reaching measures.”

Earlier, Business Post had reported that the CBN is pushing its inflation-targeting policy and expects to reduce inflation to 21.4 per cent in 2024.

Currently, the country’s inflation stands below 30 per cent at 28.92 per cent in December 2023 spurred by higher food, energy, and transportation costs.

Speaking on the NESG 2024 Report, Mr Cardoso said it aligns with the CBN plan over the next five years geared towards growth in the financial sector.

“The NESG 2024 Report resonates with the recently launched CBN strategic plan for the next five years! Our commitment to ensuring stability, promoting inclusive growth, and fostering financial sector resilience remains unwavering.”

The outlook emphasised the significance of the government adopting an economic transformation agenda to foster sustained high economic growth.

The report suggests that for Nigeria to see improvement in socioeconomic outcomes in the short and medium term, it must solve issues in three phases — the Stabilisation Phase, the Consolidation Phase, and the Acceleration Phase.

Adedapo Adesanya

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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