Nigerian measures against inflation impacts naira positively – CBN governor

Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso, views the recent surge in the local currency naira positively, attributing it to effective measures against inflation rather than direct interventions to support the currency, Bloomberg reported on Thursday.

He emphasised, during the spring meetings of the IMF and World Bank in Washington, that their aim isn’t to prop up the naira, clarifying that fluctuations in reserves aren’t linked to defending the currency.

Liquid reserves fell by 6.4 per cent since March 18, hitting a nearly seven-year low of $31.42 billion by April 15.

Cardoso, a former private sector banker who assumed office in September, downplayed the reserve decline, noting a recent $600 million influx.

He envisions a market where the central bank intervenes minimally, fostering price discovery through natural market dynamics.

The naira, rebounding from a January devaluation, has regained much of its lost ground, supported by monetary tightening and liquidity-enhancing measures by the central bank.

Cardoso sees the currency’s recovery as a signal of the bank’s commitment to curbing inflation. Nigeria’s currency journey has been tumultuous, transitioning from an artificially strong peg to a sharp decline before stabilising and rallying. Reflecting on this volatile period, Cardoso noted the drastic shift from being labeled with the worst-performing currency to being hailed as the best-performing within six months.