By Adedapo Adesanya
The Governor of the Central Bank of Nigeria (CBN), Mr Yemi Cardoso, believes the excessive volatility witnessed by the Naira in the foreign exchange (FX) market may be over based on recent reforms and continued intervention in the market.
Speaking in his latest interview with Bloomberg TV on Tuesday, the CBN governor said, “I do believe that we have more or less seen the worst in terms of volatility.”
The Naira has seen high volatility this year with the local currency going from being the best-performing currency in the world in March to facing serious headwinds in the last two months.
“We are also very alive to observing the way and manner in which that market operates and ensuring that it gives the best value that can be accomplished using certain tools,” he further said.
However, Mr Cardoso claims that his administration, which commenced in September 2023, had witnessed some development, noting that, “We’re relatively pleased with where we are.”
He stated that the central bank was not resting on its oars, adding that it would do more, saying, “It’s a continuous work in progress and we will do everything possible to ensure that we continue to manage the macroeconomic fundamentals that affect that.”
Under Mr Cardoso, the interest rates have been increased by 750 basis points this year to 26.25 per cent as part of efforts to tackle a 28-year high inflation near 34 per cent in the country.
He noted that the possibility of easing rate hikes was slim, adding that the Monetary Policy Committee (MPC) was set to use instruments available to it to tackle inflation.
“Data will direct whether they see further hikes or not,” he said.
“The MPC has been very clear in stating that they see inflation as a major impediment for the future of Nigeria, and they will do everything possible to ensure that they keep inflation in check and bring it down as reasonably as they can and I don’t see that changing,” he added.
The CBN governor also told Bloomberg TV that the apex bank would support further measures to build the country’s reserves including issuing a Eurobond and others.
“We should have a diversity of sources,” Mr Cardoso said. “It shouldn’t just be the Eurobond market, it shouldn’t just be foreign portfolio investors, it should be a hodgepodge of different things.”
Modupe Gbadeyanka