The Governor of the Central Bank of Nigeria, Dr. Olayemi Cardoso, has asked Nigerians to be patient as the bank is working hard to strengthen the Naira.
He made this plea during a public lecture titled ‘Recent Developments in the Nigerian Foreign Exchange Market: Issues, Options, and the Way Forward’ organized by the Nigerian Economic Society at the CBN Centre of Excellence Hall, University of Ibadan, in 2024.
The CBN governor, represented by Dr. Usman Opanachi from the Department of Monetary Policy, stated at the event: “Anytime the Naira is on trial, the CBN is also on trial. We are working day and night to address the challenges, and we hope things will work out.
“The exchange rate features nearly in every sector. The exchange rate and inflation are very high now. The exchange rate is a problem.
“Excess demand for forex in Nigeria is a legendary problem. It has just been there, and over the years, the bank has implemented various strategies to address this problem. Those strategies have only been able to provide some temporary relief.
“The Central Bank of Nigeria does not supply or produce dollars. It is the naira that it produces. The CBN management thinks when you hold the price of a commodity that is determined by forex down artificially, a time comes when you will not be able to do that.
“The thinking of the new management of CBN is that the policies you have are intended to address the problem. The approach the management has adopted is the market forces approach. The bank now allows the market forces to play a greater role in the determination of the price of naira.”
During the lecture, Professor Sam Olofin, a well-known economist, mentioned that it will be challenging for the CBN to regulate the foreign exchange market due to the prevailing dominance of parallel market forces.
Regarding the development of the Nigerian Foreign Exchange Market, Olofin stated: “We are only applying the same old drugs on a patient without any good results. The parallel markets are outside the purview of the CBN.”
In his welcome address, the President of the Nigerian Economic Society, Prof. Adeola Adenikinju, urged the Federal Government to consult economists on the weak economy.
