We must control our FX demands: CBN Governor, Cardoso
***States that the CBN's aim for inflation is to limit it to 21.4%.
Olayemi Cardoso, Governor of the Central Bank of Nigeria (CBN), has urged Nigerians to temper their demand for currency, while also warning that as a country, we must handle the supply side of forex because it has locked the nation’s economy in a restricted bucket.
He stated that the apex cannot intervene directly, but will instead collaborate rather than take on the danger of intervention. We need to handle the supply side of forex. It has limited our options.
Speaking on Friday when he appeared before the Senate Joint Committees on Finance, Banking and Other Financial Institutions, and National Planning, Cardoso, who noted that the CBN’s target on inflation is to moderate it to 21.4%, said that the adoption of the inflation-targeting framework involves clear communication and collaboration with fiscal authorities to achieve price stability, potentially leading to lower policy rates, stimulating investment, and creating job opportunities.
According to the CBN Governor, the Monetary Policy Committee (MPC) meeting set for the 26th and 27th of February is also expected to evaluate the situation and make further decisions on these critical concerns.
Cardoso, who explained that the shift to a single rate was intended to stabilize the market and address exchange rate volatility, and claimed that over $1 billion has entered the market, stated that the market has responded to the policy that we have implemented, adding that “for these measures to be sustainable, we must moderate our demands for forex.” We are working extremely hard to restore trust to the CBN, and we do not have to beg many of the investors who have previously viewed the environment negatively. If we do the right thing, investors will come. They must think that you will do the right thing before they come.
I’d also like to point out that there were some steps we had to take in order to create trust.
“We must moderate our demands for forex. Where there are opportunities to substitute locally, so we should. The total quantum for education and medical are more than our external reserves. If we are able to up our game on education, medicals, there won’t be need for our people to go abroad.”
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