Despite slump to N1,500/$1, Cardoso says worst of naira volatility over

Despite the recent slump by the Naira against the dollar, Olayemi Cardoso, governor of the Central Bank of Nigeria (CBN) has expressed optimism that the excessive volatility of the naira may be a thing of the past.

This is even as he disclosed that the apex bank is “relatively pleased” with the progress it has made in stabilising the naira.

Ripples Nigeria reports that the naira for the second consecutive day this week slumped to N1,500/$1 on Tuesday, June 25, 2024.

However, a defiant Cardoso speaking in an interview with Bloomberg TV on Tuesday expressed optimism that the worst may be over.

“I do believe, I do believe that we have more or less seen the worst in terms of volatility. I believe we’ve seen the worst in volatility. We are happy that the market is now such that willing buyers and willing sellers operate within the market.

“In the past two, three weeks, after a period of volatility, we’ve seen a lot of stability within the market. There’s hardly been any movement in the currency.

“We feel that a number of things have happened, okay, one of which is the fact that more confidence has come back into the market, a lot of inflows have come back because there was very little liquidity at the time, and potential players within the market, both on the buy and the sell side, are more confident in the future.

READ ALSO:Cardoso to Nigerians: Pains of ongoing monetary, fiscal reforms temporary

“And when I talk about even the buy side, bear in mind the fact that in the past what used to happen was people were panicking and front-loading their requests. Now a lot of that has also calmed down and there’s no inclination to do that because liquidity has come back into the market.

“We don’t believe that we’ve got into the, you know, position we want to stay at. It’s continuous work in progress and we will do everything possible to ensure that we continue to manage the macroeconomic fundamentals that affect that market in such a way that it will continue to improve.

“We are also very alive to observing the way and manner in which that market operates and ensuring that it gives the best value that can be accomplished using certain tools. It’s also important to mention though that the monetary and fiscal work closely together.

“So, I would only be giving you one picture if I said, you know, the monetary does that, the monetary does something else, but they work very closely together and I believe that complementarity is what will give us the optimum rate for the Naira over a period of time” he said.

Since the beginning of June, the naira has been trading in a narrow range between N1,473 and N1,490 per dollar at the official market.

However, the naira fell to N1,500/$ on Tuesday – from N1,488 traded on June 24.

By: Babajide Okeowo

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