The Governor of the Central Bank of Nigeria, Olayemi Cardoso has clarified that the apex bank is not utilising the nation’s foreign reserves to strengthen the Naira.
Cardoso, while addressing concerns about the recent decline in Nigeria’s foreign reserves corresponding with massive appreciation of the Naira in the foreign exchange market (forex), at the ongoing Spring Meetings, maintained that the CBN was committed to advancing a forex market based on willing buyers and sellers.
He also noted that the issue of Ways and Means, involving federal government borrowings from the CBN, has been resolved through fiscal authorities securing outstanding debts.
The CBN boss spoke at the on-going Spring Meetings on Tuesday. He stated:
“Defending the Naira, from every indication is an elephant in some rooms. I will make this as clear as possible. It is not our intention to defend the Naira.
“Much as I have read in the recent few days some opinions about what has happened in terms of our reserves being drawn down, the CBN Defending the Naira, if you take your mind to our philosophy and policy, you will see it will be counter intuitive. We want the Naira to perform independently as long as we have a vibrant forex market.
“Initially we needed to keep the BDCs going. So, it is important for people to get forex for school fees, travels and the like,” he said.
He also explained that the shift in the country’s reserve was not to defend the Naira.
“The shift you see in our reserve is not to defend the Naira but for things like settling obligations that fell due. Mind you, that is the reason for keeping foreign reserves, in the first place.”
Cardoso also said that his team is cooperating with the fiscal authorities and that, “Ways and Means is no longer an issue,” he said.
The Naira saw a notable appreciation against the United States dollar in the official market on Wednesday, closing at N1,072.74 per $1, compared to the Tuesday rate of N1,148.14 per $1, market data reported on the FMDQ website.