Business

CBN Governor Cardoso Give Reasons For Fall in Naira’s Value

Published by Tope Fakinlede on May 23rd, 2024.

CBN Governor Cardoso Give Reasons For Fall in Naira’s Value

Olayemi Cardoso, the governor of the Central Bank of Nigeria (CBN), has attributed the recent decline and instability of the naira to “seasonal demand” in the global foreign exchange market. According to reports from Peoples Gazette and Aboki Forex, the naira, which exchanged for N1,000 in April, had fallen to N1,500 by Wednesday afternoon.

During the Monetary Policy Committee (MPC) meeting in Abuja on Tuesday, Mr. Cardoso explained that the naira’s instability is due to the dynamic relationship between demand and supply in the market.

“Members noted the recent fluctuations in the foreign exchange market, attributing them to seasonal demand. This reflects the natural interaction between demand and supply in a freely functioning market system,” Mr. Cardoso stated.

He assured that the CBN is developing strategies to alleviate the economic impact of these seasonal demands. “There is light at the end of the tunnel,” he said. “We are beginning to see some reliefs, indicating that the tools the CBN is employing are effective.”

Mr. Cardoso also highlighted the CBN’s approval of 14 International Money Transfer Operators (IMTOs), which is expected to foster competition and reduce transaction costs.

“The MPC praised the bank for approving 14 International Money Transfer Operators,” Mr. Cardoso said. “This move is anticipated to enhance competition and lower transaction costs, thereby attracting more remittances through formal channels.”

The naira’s instability has significantly impacted the purchasing power of Nigerians, who rely heavily on imported goods for their daily needs.