Naira has been stable since June, Cardoso says 

Speaking after the 298th meeting of the CBN’s Monetary Policy Committee (MPC) in Abuja on Tuesday, Cardoso emphasized that the central bank’s efforts to manage the currency and stabilize prices have begun to yield positive results.

During the briefing, Cardoso acknowledged the importance of addressing both the value and stability of the naira, drawing a distinction between the two concepts. While the value of a currency is subject to various macroeconomic factors, the CBN’s primary goal is to ensure its stability, which is vital for economic planning and growth.

Cardoso explained that the focus of the CBN has always been on maintaining the stability of the naira, which he described as essential for fostering an environment conducive to economic planning and investment.

He said: “The Central Bank of Nigeria is there to provide stability. Stability helps you to plan. We do all we can with all the tools available and there are multiple tools including sanctioning those with bad behavior, a whole host of different things to ensure their stability. Now if you look and measure stability between June and now, you find out it has been stable. It has been stable. The currency has been stable.” 

According to the CBN governor, since June 2024, the naira has remained stable, despite some pressure points from both domestic inflationary trends and global economic uncertainties. This period of stability, Cardoso noted, is a direct result of deliberate policies aimed at reducing currency volatility and creating a more predictable economic environment.

The CBN governor pointed out that while the central bank cannot control the fundamental drivers of the currency’s value, such as supply and demand dynamics, fiscal deficits, and the country’s balance of payments, it can effectively manage the volatility around these factors.

The central bank’s approach to managing the naira’s stability, according to Cardoso, has involved a combination of interventions and strategic policy measures.

These include addressing the supply-side bottlenecks that previously hindered the flow of foreign exchange into the country, such as challenges in diaspora remittances and foreign capital inflows.

Cardoso highlighted that the CBN had made significant strides in improving these channels, resulting in a steady increase in reserves.

However, while the central bank can manage currency volatility, Cardoso cautioned that it cannot control the underlying economic fundamentals that dictate a currency’s true value. Factors such as Nigeria’s balance of payments, fiscal policies, and the nation’s reliance on imported goods all play a significant role in determining the strength of the naira.