Stabilizing Exchange Rate: High Hopes for Nigeria’s New Central Bank Governor – In a significant move, Olayemi Cardoso has been appointed the new governor of the Central Bank of Nigeria (CBN) by President Bola Tinubu. Economists and market analysts believe that Cardoso’s primary focus will be establishing a stable exchange rate, a pressing concern given the recent fluctuations.
A Warm Reception for Cardoso
The new appointment, announced on Friday, has garnered positive reactions from numerous financial experts. A majority of the analysts polled by BusinessDay see this development as a promising step towards a stable economic future for Nigeria.
Razia Khan, managing director and chief economist, Africa and Middle East Global Research at Standard Chartered Bank, commented, “The government’s reform agenda will likely gain momentum in the coming weeks with the new nominations at the CBN.” Khan believes that this move will accelerate foreign exchange liberalization, boosting the credit market.
Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, observed that this shake-up was anticipated, especially after Tinubu’s hint of restructuring within the Central Bank during his inaugural speech. Yusuf praised Cardoso’s qualifications and emphasized the need for transparency in foreign exchange management.
Uche Uwaleke, a professor of Capital Market at the Nasarawa State University Keffi, echoed these sentiments. He stated, “Cardoso’s appointment sends the right signals to financial markets.” For him, the key challenge lies in exchange rate management.
The State of the Naira
Concerns about the exchange rate have grown as Nigeria’s currency, the naira, recently hit an all-time low of N955 per dollar in the parallel market. The official FX market, the Investors’ and Exporters’ (I&E) forex window, also witnessed a depreciation in the naira by 2.88 percent.
Charlie Robertson, head of macro strategy at FIM Partners UK Ltd, believes Cardoso’s appointment will bolster investor sentiment towards Nigeria. Onoja Usman, managing director/CEO of Lovonus Microfinance Bank Limited, expressed optimism about Cardoso’s ability to steer the CBN in the right direction, given his commendable track record.
Aminu Gwadabe, national president of the Association of Bureau De Change Operators of Nigeria, emphasized the importance of Cardoso’s role in ensuring the stability of the naira. He advised the new management to engage relevant stakeholders for a more proactive policy design and implementation.
Olayemi Cardoso’s appointment as the new governor of the Central Bank of Nigeria has rekindled hopes for a more stable economic environment in the country. With the challenges of fluctuating exchange rates and external pressures, all eyes will be on Cardoso and his team to bring about the much-needed stability and growth for Nigeria’s financial future.