Nigeria: CBN Governor Commends Recent Forex Stability

Yemi Cardoso, the Governor of the Central Bank of Nigeria (CBN), expressed commendation for the recent stability achieved in the foreign exchange market. He made this statement on Tuesday in Abuja while presenting the communique from the 294th meeting of the apex bank’s Monetary Policy Committee (MPC).

Cardoso attributed the stability to the recent policy actions and reforms implemented by the CBN. These measures are designed to restore investors’ confidence and attract foreign investments into the country.

“The committee noted with satisfaction the level of stability achieved in the foreign exchange market in the last few weeks. This, in the view of members, reflects the impact of the CBN’s recent policy actions and reforms, as well as increased transparency in the market. In addition, the committee noted the efforts of the apex bank in offsetting verified foreign currency obligations, an action that will greatly enhance investor confidence and attract foreign investments to Nigeria,” he stated.

The MPC also reviewed developments in the banking system, noting that the industry remained safe, sound, and stable. Cardoso assured that the apex bank would sustain its surveillance efforts to ensure compliance with existing regulatory and macroprudential guidelines by deposit money banks.

Regarding domestic headline inflation, Cardoso revealed that it rose further to 31.70 per cent in February from 29.90 per cent in January. Food inflation also accelerated to 37.92 per cent from 35.41 per cent, while core inflation rose to 25.13 per cent from 23.59 per cent.

“The key drivers of inflationary pressure remain the strong exchange rate pass-through to domestic prices, rising cost of transportation, high cost of energy and other production inputs. Lingering insecurity, especially in food-producing areas, and legacy infrastructure deficits are also responsible,” he explained.

Cardoso emphasized that the committee would continue to monitor developments in the global and domestic economies to ensure that inflationary expectations were anchored, aiming to restore and sustain macroeconomic stability.