Our policies are working; $1 billion has entered the market in the last few days—Cardoso.

The Governor of the Central Bank, Yemi Cardoso, believes the apex bank’s efforts to stabilise foreign exchange rates have begun to generate positive effects.

He stated that these actions would assist to stabilise foreign exchange rates and reduce the distortion that high exchange rates have on inflation, as the two are inextricably linked.

Cardoso, speaking at a Joint Senate Committee on Finance, Banking, Insurance, and Financial Institutions briefing on Friday, stated that the CBN’s operations have brought $1 billion into the Nigerian market in recent days.

“We’re already seeing favourable shifts. Indeed, CBN efforts have already begun to yield early results, attracting significant interest from international portfolio investors, which was a source of concern. That has already begun to provide much-needed foreign exchange to the economy.

“For example, over the last few days, we’ve seen over $1 billion enter the market, which has answered the issue of whether our policies are functioning,” Cardoso added.

The CBN Chief stated that based on the available data, he can conclude that the market has responded to the policies implemented.

He noted that initiatives aimed at increasing US dollar supply in the Nigerian economy have great potential for taming exchange rate volatility and, as a result, lowering inflation.

He did, however, state that for these steps to be sustainable, Nigeria as a country must temper its demands for foreign money.

While he believes the CBN is working hard to rebuild its credibility, he maintains that the real issue influencing the exchange rate is the need for US dollars for business and personal reasons.

The CBN Governor also stated that inflation is likely to fall this year utilising the inflation targeting framework and decrease to 21.1%.

On January 31, the committee called the Central Bank Governor to appear before it.

The move comes amid growing concerns about the status of the economy and the naira’s steep drop in the foreign currency market.

Senators have asked the CBN to explain the country’s present economic issues.

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