The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has affirmed that the value of the naira has demonstrated significant stability since June 2024, despite ongoing challenges in both the global and domestic economic landscapes.
Speaking after the 298th meeting of the CBN’s Monetary Policy Committee (MPC) in Abuja, Cardoso highlighted that the central bank’s targeted efforts to stabilize the currency and manage inflationary pressures have begun to show positive results. He emphasized that while the CBN cannot control all the factors that influence the currency’s value, it can focus on stabilizing the naira, which is crucial for fostering economic planning and growth.
“The Central Bank of Nigeria is there to provide stability. Stability helps you to plan. We do all we can with all the tools available…to ensure their stability. If you look and measure stability between June and now, you’ll find that it has been stable,” Cardoso remarked during the briefing.
The CBN governor pointed out that since June 2024, despite external pressures such as global economic uncertainty and domestic inflation, the naira has remained stable, with fluctuations being minimal. This stability is largely attributed to the CBN’s strategic policy interventions aimed at reducing currency volatility and creating a predictable economic environment.
Policy Interventions and Economic Fundamentals
Cardoso elaborated on the central bank’s policy approach, which includes addressing key supply-side bottlenecks that have historically hindered foreign exchange inflows. These challenges, such as difficulties in receiving diaspora remittances and attracting foreign capital, have been gradually overcome through targeted interventions, contributing to a steady increase in Nigeria’s foreign exchange reserves.
The CBN governor emphasized that while currency value is primarily driven by factors like the country’s balance of payments and fiscal policies, the central bank’s role in managing volatility remains critical. He acknowledged that fiscal deficits, the demand-supply dynamics of foreign exchange, and Nigeria’s dependency on imports continue to influence the strength of the naira.
Call for Import Substitution
In light of these challenges, Cardoso urged Nigerians to support import substitution policies and prioritize locally made goods over foreign products. He expressed optimism that efforts to diversify the economy, particularly through initiatives that encourage domestic production, will reduce the reliance on imports. This shift, he believes, will not only contribute to the stability of the naira but also ease pressures on the foreign exchange market.
Cardoso concluded that while reserves remain an essential buffer for the economy, especially in times of global crises such as the COVID-19 pandemic, stabilizing the naira requires continued focus on both fiscal discipline and fostering a more resilient domestic economy.
