Dr. Yemi Cardoso who is the Governor of the Central Bank of Nigeria (CBN), has explained the reasons why the country’s foreign exchange reserves dipped in recent months, stressing that it was not an attempt to defend the Naira but to boost FX liquidity in the Bureau De Change segment of the foreign exchange market.
Africa Today News, New York reports that the FX reserves dropped to $32 billion yesterday, in what many commentators said was a worrisome development that needed to be explained to avoid panic.
However, Cardoso while speaking at an interface with the media and other stakeholders at the ongoing IMF-World Bank Spring Meetings in Washington DC, said there was no cause for alarm as the nation’s economic ship was sailing in the right direction.
According to him, what the CBN has done to make the naira stronger is what many other jurisdictions have done, which is to step in and attain stability in a place where volatility hitherto reigned.
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“It is not our intention to defend the naira. Much as I have read in recent days as regards about what’s in our reserves, it’s not that real thing. If you think back to our overall strategy, you will know we’re running a willing buyer, willing seller market and in future, the CBN will hands off intervening unless in certain special circumstances.
“As long as we have a vibrant currency market, we don’t need any intervention.
“We needed to get that BDCs going to catalyse that part of the FX market so individuals have access to funds to help wards abroad and all that but it was not designed to defend the naira.
“The shift in our reserves is what you’ll find in all jurisdictions. About $600 million came in a few days ago to shore up the fx reserves.
“The shift has nothing to do with defending the naira and that’s not our objective”, he explained.
The CBN Governor further revealed that the reforms in the finance sector were already yielding positive results as the naira moved from the worst performing currency to the best in six months.
He also assured that the monetary policy and fiscal policy are on the same in battling inflation, achieving price stability and generally building a vibrant economy.
Cardoso asked anxious Nigerians to keep faith with the CBN as the journey to the promised land has begun but would not be a smooth one as there has been sedimented rot in the system that needs to addressed.