Olayemi Cardoso, the Governor of Nigeria’s Central Bank, has announced the end of the recent concerns over the naira’s devaluation, attributing this stability to improved market liquidity.
In a 20-minute interview with Bloomberg, Cardoso reported a significant improvement in market conditions, revealing that Nigeria’s total foreign exchange (FX) inflow reached $24 billion in the first quarter of the year. He assured that the country’s financial challenges were temporary and praised recent policy measures aimed at increasing revenues and the tax-to-Gross Domestic Product (GDP) ratio.
Reflecting on his approximately 10-month tenure, Cardoso acknowledged substantial FX market distortions upon his arrival, which he and his team have been progressively addressing.
“We have observed a notable return of market confidence,” Cardoso stated. He explained that improved liquidity has led to increased confidence among market participants, on both the buying and selling sides.
“A significant amount of inflows has returned because liquidity was previously very low, causing market players to feel more secure about the future,” he added. Cardoso explained that past panic-driven, front-loaded requests have diminished as liquidity has returned, bringing stability back to the market.
“In the last few weeks, we’ve observed considerable market stability after a period of volatility, with minimal currency movement and merging exchange rates,” he noted. The governor highlighted that this convergence allows companies to plan more effectively.
However, Cardoso admitted that ongoing efforts are still necessary. “We have not yet achieved our desired position. This is a continuous work in progress, and we are committed to managing the fundamentals that influence the market to ensure ongoing improvement,” he concluded.
