In a recent statement, Olayemi Cardoso, the governor of the Central Bank of Nigeria (CBN), attributed the decline and instability of the Naira to the “seasonal demand” prevalent in the global foreign exchange market.
Speaking at the Monetary Policy Committee (MPC) meeting in Abuja on Tuesday, Cardoso emphasized that the naira’s instability is a result of the interplay between demand and supply in the market.
He acknowledged the recent volatility in the foreign exchange market and described it as a reflection of these dynamics.
“Members further observed the recent volatility in the foreign exchange market attributing this to seasonal demand, a reflection of the interplay between demand and supply freely functioning market system,” Cardoso stated.
Despite the challenges posed by seasonal demands, Cardoso expressed optimism and reassured stakeholders that the CBN is actively working on modalities to alleviate the economic burden caused by these fluctuations.
“There is light at the end of the tunnel,” Cardoso affirmed. “We are beginning to get some reliefs,” he added, citing positive indications that the measures implemented by the CBN are effective in addressing the situation.
One such measure highlighted by Cardoso is the recent approval of 14 International Money Transfer Operators (IMTO) by the CBN.
He emphasized that this step is expected to enhance competition and reduce transaction costs, thereby encouraging more remittances through formal channels.
“The MPC commended the bank for its recent approval of 14 International Money Transfer Operators (IMTO),” Cardoso noted. “This is expected to improve competition and lower the cost of transactions, thus attracting more remittances through formal channels.”
The instability of the Naira has significant implications for Nigerians, particularly in terms of purchasing power, as many rely heavily on imported goods for daily survival.