At the ongoing Spring Meetings of the International Monetary Fund (IMF)/World Bank in Washington DC, the Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, made a statement emphasizing the bank’s stance on defending the naira. In a departure from past practices, Cardoso clarified that it is not the CBN’s intention to defend the naira with foreign reserves, emphasizing a market-driven approach for the currency.
“The recent changes in our reserves are not for defending the naira”, the CBN boss clarified, adding “they are for settling obligations that were due. After all, that’s the primary purpose of holding foreign reserves.” he stated.
Cardoso highlighted the importance of collaboration with the federal government, particularly in fiscal policy matters, illustrating the need for a coordinated effort in economic management. The governor also spoke about the CBN’s pivot towards orthodox central banking practices, including a substantial interest rate hike, aimed at bolstering confidence in the naira.
“We want Nigerians to be realistic. The Monetary Policy Committee (MPC) has consistently explained the rationale behind our actions,” the CBN governor stated.
In terms of communication and transparency, Cardoso pledged to enhance engagement with Nigerians and stakeholders, utilizing various platforms to manage expectations and ensure clarity regarding the bank’s policies. The governor expressed satisfaction with the initial outcomes of the implemented measures.
