Nigeria’s Cardoso Heralds ‘Positive Outcomes’ From Naira Reforms

admin By admin

(Bloomberg) — Nigerian central bank Governor Olayemi Cardoso said that dollar liquidity in the country’s currency market has risen sharply, pointing to “positive outcomes” from recent reforms.

Transaction volumes totaled $844 million on Feb. 5, he told Nigerian lawmakers Tuesday in Abuja, the capital. “This is the first time in many years it has achieved this level,” he said.

The naira has fallen 37% against the dollar since Jan. 26, following steps by the central bank that moved it close to its value on the street — part of an ongoing strategy to unify Nigeria’s official and unofficial foreign-exchange markets and boost investment. 

The scarcity of dollars in the domestic market has been a key source of the currency’s weakness, which the central bank has tried to arrest by encouraging Nigerians living abroad to repatriate their money through official channels.

“I want to emphasize that we are now at a turning point,” he said. “I’m confident that positive outcomes are already emerging and will become more apparent in the near future.”

Nigerian President Bola Tinubu eased currency controls and scrapped fuel subsidies after he took office in May to spur economic growth. International investors welcomed the measures, but the moves caused pain at home by raising the inflation rate to near a three-decade high of 28.9% in December.

Cardoso said he expected price pressures to decline over 2024 in response to the central bank’s shift to directly targeting lower inflation as it seeks to restore orthodox monetary-policy practices.

Finance Minister Wale Edun, addressing lawmakers a few minutes later, said that Nigeria had been “on the road to economic disaster” prior to the reforms but was now in a much better place.

Read More: Nigeria Finances Are ‘On the Mend,’ Central Bank Chief Says

“Let us be confident. Let us be calm. Let us be assured,” Edun said. “The way forward is up.”

–With assistance from Anthony Osae-Brown and Paul Richardson.

(Updates transaction-volume figure in second paragraph.)

More stories like this are available on bloomberg.com

©2024 Bloomberg L.P.

Here’s your comprehensive 3-minute summary of all the things Finance Minister Nirmala Sitharaman said in her Budget speech: Click to download!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Check all the latest action on Budget 2024 here.
Download The Mint News App to get Daily Market Updates.

More
Less

Published: 07 Feb 2024, 12:39 AM IST

Share This Article
Leave a comment