In efforts to stabilize the value of the Naira in the foreign exchange market, Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso, has urged Nigerians to reduce their reliance on the United States Dollar (USD) and the consumption of foreign goods.
Cardoso made these remarks during an interactive session with the Joint Senate Committees on Finance, Appropriations, Banking, Insurance, and other Financial Institutions in Abuja. He emphasized that without a decrease in the demand for USD, the CBN cannot single-handedly stabilize the Naira.
However, Cardoso informed the legislative committee that recent measures implemented by the CBN are yielding positive results, with approximately $1 billion flowing into the economy.
He highlighted that the Nigerian foreign exchange market is currently under pressure due to various factors, including speculative forex demand, insufficient forex supply, increased capital outflows, and excess liquidity.
To address the volatility in the exchange rate, the CBN has initiated a comprehensive strategy to boost liquidity in the FX markets. This strategy includes consolidating FX market segments, settling outstanding FX obligations, implementing new operational mechanisms for Bureau de Change (BDCs) and International Money Transfer Operators (IMTOs), enforcing the Net Open Position limit, conducting Open Market Operations, and adjusting the remunerable Standing Deposit Facility cap, among other measures.
