The Governor of the Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso, has reiterated the determination of the apex bank’s Monetary Policy Committee (MPC) to moderate the surging inflation in the economy through the adoption of conventional methods.
Cardoso made this remark in an interview with Bloomberg in London on Tuesday while speaking on the key insights on the current state of the foreign exchange market, mainly focusing on the stability of the Naira and inflation rates.
While noting a deceleration in the month-on-month inflation rates, highlighting it as a positive development, he maintained that the MPC members remained vigilant in monitoring inflation trends and ensuring a moderation of inflation numbers.
He assured: “MPC members will continue to monitor the trajectory and are determined to ensure that they put inflation under control.”
While highlighting a period of stability following previous volatility in the foreign exchange market, he expressed optimism about the recent improvements in liquidity and return of confidence to the market.
He attributed the new development to increased liquidity and a calmer approach from market participants on both the buy and sell sides.
“In the past, people were panicking and front-loading their requests,” he explained, stressing that “Now, a lot of that has calmed down. There’s no inclination to do that because liquidity has returned to the market.”
The banker also highlighted the significant achievement of merging disparate exchange rates into a more unified system.
He explained: “We had two different rates; right now, we more or less have one rate. And we believe that this is good. It allows companies to plan.”
In addition, he expressed confidence in the current market dynamics, where willing buyers and sellers operate freely, noting that it had contributed to the stability of the Naira.
He, however, harped on the importance of continuous observation and management to ensure the market benefits all participants.
Cardoso highlighted the crucial role of coordinated monetary and fiscal policies in achieving economic stability, adding that the collaboration was essential for managing the macroeconomic fundamentals that influence the market, aiming to provide the best value for the Naira.
It would be recalled that Nigeria’s annual inflation rose to a 28-year high of 33.95% in May 2024, but recent data from the National Bureau of Statistics reveals that the month-on-month inflation rate had slowed for the third consecutive month, validating the effectiveness of the Central Bank of Nigeria’s monetary policy tightening measures.
