Our Policies Have Stabilised Naira at Official, Black Markets—Cardoso

He made this disclosure while speaking during the just-concluded inaugural Conference on Emerging Markets Economies organised by the Ministry of Finance, Saudi Arabia, and the International Monetary Fund (IMF) Regional Office in Riyadh.

During a meeting with Mr Talal Al-Humond, the Assistant Governor for Monetary Affairs, Saudi Arabia Central Bank (SAMA), Mr Cardoso said there were lessons to be learned from Saudi Arabia in terms of infrastructural development and tourism.

According to him, Saudi Arabia’s dedication to diversifying its economy through innovative environmental projects, large-scale transformation, and tourism investment is essential for development.

Mr Cardoso also reaffirmed his dedication to collaborating with the Nigerian Diaspora community in the Middle East to improve remittance flows and strengthen Nigeria’s financial sector.

He stated that the CBN will continue enhancing macroeconomic fundamentals to establish an enabling environment that will facilitate the growth of the private sector and the generation of high-quality jobs for Nigerians.

On his part, Mr Al-Humond assured Cardoso that the Saudi Central Bank will work with the CBN to ensure the attainment of mutually beneficial objectives.

Meanwhile, during the panel discussion moderated by the Director, Middle East and Central Asia Department, IMF, Mr Jihad Azour, at the conference, Mr Cardoso cited reforms in the financial markets that addressed distortions in the Nigerian foreign exchange market, which had previously experienced a gap of up to 60 per cent between the official and parallel market exchange rates.

Governor Cardoso also highlighted the adoption of an electronic matching system to improve transparency in the market and the introduction of a foreign exchange code of ethics, which all Nigerian banks signed to ensure adherence to market rules. As a result of these measures, he reported that the country’s foreign reserves had exceeded $40 billion, marking the highest level in nearly three years.

He acknowledged that Nigeria had faced significant economic challenges, including capital flow exits, multiple exchange rate regimes, currency depreciation, high inflation, and a backlog of foreign exchange transactions, which led to a loss of confidence in the country’s currency.

Upon assuming office, he stated that his team prioritised restoring confidence in the market by addressing the backlog of foreign exchange transactions and demonstrating a commitment to economic stability.

Mr Cardoso emphasised that Nigeria implemented a tight monetary policy stance to tackle inflation and restore macroeconomic discipline. Over the past year, he explained that the Bank raised interest rates by 850 basis points and shifted away from quasi-fiscal interventions that had distorted the economy.

He stressed that Nigeria’s approach had remained firmly rooted in orthodox monetary policies, a stance that was consistently communicated to market participants.

Another significant reform, he noted, was the removal of the fuel subsidy, which, along with multiple exchange rate inefficiencies, had cost the country approximately 6 per cent of its Gross Domestic Product (GDP) annually.

He acknowledged that previous administrations had lacked the political will to remove the subsidy, but its elimination has had a profound positive impact on Nigeria’s fiscal outlook.

He also explained that the CBN had mandated banks to recapitalise to strengthen the financial system and build buffers to withstand future economic shocks. He noted that these measures had so far proven successful in bolstering the sector.