What will sustain naira’s appreciation, Cardoso explains

The governor of the Central Bank of Nigeria, Olayemi Cardoso, says continued liquidity in the foreign exchange market will sustain naira’s appreciation. Cardoso disclosed this on Wednesday during the ongoing International Monetary Fund/World Bank Spring Meetings held in Washington, D.C., United States. He explained that Nigeria’s FX market has sufficient liquidity, between $600 million and $1 billion.

Cardoso noted that the apex bank would continue encouraging a willing-buyer and willing-seller price discovery system in the country’s FX market.

According to him: “What we are encouraging is for the market to be a willing-buyer and willing-seller price discovery system, and ultimately, I perceive a future where the Central Bank would not intervene except in very unusual circumstances.

“What is important to us is sufficient liquidity in the market. We recorded trading of $1 billion; sometimes, it is $600 million or $700 million, as the case may be and will continue. So, as long as we have a vibrant currency market, why must we intervene? There has been little amount given to the Bureau de Change to get that segment going, and a small amount of money has gone into that to catalyse it because individuals must have access to funds for school fees, health, and the rest.”

Cardoso said a $600 million inflow came into the country’s foreign exchange reserves earlier.

Naira recorded a significant N75 gain against the dollar at the foreign exchange market on Wednesday.