"CBN Governor urges Nigerians to curb appetite for US currency and foreign products."
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“CBN Governor urges Nigerians to curb appetite for US currency and foreign products.”

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The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has urged Nigerians to exercise restraint in their demand for dollars and in their consumption and reliance on foreign goods. Cardoso emphasized the need to address the supply side of foreign exchange (Forex), stating that it has significantly constrained the nation’s economy.

Highlighting that the CBN cannot swiftly stabilize the Naira without a moderation in USD demands, Cardoso acknowledged the positive impact of recent measures implemented by the apex bank, resulting in approximately $1 billion inflow into the economy. He stressed the importance of partnership over direct intervention, aiming to mitigate associated risks.

Speaking before the Senate Joint Committees on Finance, Banking, and other Financial Institutions and National Planning, Cardoso outlined the CBN’s inflation target of 21.4%, emphasizing the adoption of an inflation-targeting framework involving collaboration with fiscal authorities to achieve price stability. He mentioned that the upcoming Monetary Policy Committee (MPC) meeting in February would reassess the situation and make further decisions.

Regarding exchange rate volatility, Cardoso explained the shift to a single rate aimed to stabilize the market and curb rate fluctuations. He highlighted various measures implemented to enhance liquidity in the FX markets, including unifying market segments, addressing outstanding obligations, and adjusting operational mechanisms for BDCs and IMTOs.

Cardoso stressed the importance of sustainable measures, urging moderation in forex demand. He also expressed optimism regarding inflation reduction to 21.4% in 2024, attributing it to the CBN’s inflation-targeting policy and improved agricultural productivity.

Additionally, government officials, including the Ministers of Finance, Budget and National Planning, Agriculture, and Food Security, addressed concerns raised by senators on the state of the economy. Discussions ranged from subsidy removal challenges to the need for fiscal and monetary measures to achieve economic goals.

In response to queries on loan utilization and compliance, senators emphasized the necessity of forensic investigations and regulatory compliance within the banking sector. Suggestions were made to boost food supply and reduce inflationary pressures.

Senator Orji Uzor Kalu advocated for measures to strengthen the Naira and reduce dependence on the dollar. He also urged accountability in addressing defaults and reconciling with labor unions to avert potential crises.

Chairman of the Joint Committees, Senator Yahaya Abdullahi, emphasized unity between the National Assembly and the executive branch to tackle economic challenges effectively. He stressed the need for collaborative efforts to address prevailing issues.

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