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Tag: Cardoso

  • Diaspora remittances up 79% to $4bn in 9M’24 — Cardoso

    Diaspora remittances up 79% to $4bn in 9M’24 — Cardoso

    Diaspora remittances through International Money Transfers Operators (IMTOs) rose massively to $4.18 billion in the first three quarters of 2024 (9M’24), about 79.4 percent above the $2.33 billion in the same period of 2023.

    Governor of the Central Bank of Bank (CBN), Mr. Olayemi Cardoso, disclosed this at the Monetary Policy Stakeholders Forum, in Abuja, yesterday.

    He attributed the positive development to the various reforms introduced by apex bank in the past one year.

    He stated: “Beyond monetary policy, the bank undertook critical reforms to strengthen the financial system and ensure macroeconomic stability.

    “This reform yielded tangible results, with remittances through IMTOs rising 79.4 percent in the first three quarters of 2024 to US$4.18 billion, compared to US$2.33 billion in the same period of 2023.”

    The CBN boss said the past year presented significant challenges, including persistent inflationary pressures exacerbated by global and domestic shocks.

    He explained: “The liquidity injections associated with unorthodox monetary policies, particularly since the COVID-19 pandemic, have created a significant overhang. While these measures were intended to cushion immediate shocks, they did not translate into commensurate productivity growth, fueling inflationary pressures and heightened foreign exchange volatility.

    “Excess naira liquidity in the system has amplified demand-driven inflation, further exacerbated by supply-side constraints stemming from structural deficits. These dynamics underscore the importance of a disciplined and coordinated approach to monetary policy to restore stability.

    “In response, the Monetary Policy Committee initiated a tightening cycle using orthodox approaches. Throughout 2024, the bank implemented several bold policy measures across six MPC meetings, including raising the Monetary Policy Rate (MPR) by a cumulative 875 basis points to 27.50 percent, increasing the Cash Reserve Ratio (CRR) of Other Depository Corporations (ODCs) by 1750 basis points to 50.00 percent, and adjusting the asymmetric corridor around the MPR.

    “Counterfactual estimates suggest that without these decisive policy interventions, inflation could have reached 42.81 percent by December 2024.”

    He stressed that despite the headwinds his commitment to price and monetary stability has yielded measurable progress.

    Cardoso noted that inflation erodes purchasing power, discourages investment, and exacerbates inequality but that managing the disinflation process requires a careful balance of policies that mitigate short-term costs while anchoring long-term stability. “CBN is fully committed to ensuring price stability while minimizing adverse effects on growth and livelihoods,” he added.

  • CBN will soon commence final settlements of $7bn FX backlog — Cardoso

    CBN will soon commence final settlements of $7bn FX backlog — Cardoso

    Governor of the Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso yesterday said that the apex bank will soon commence final settlements of the outstanding amount from the $7 billion foreign exchange obligation backlog.

    Cardoso at the   launch of the new Foreign Exchange, FX Code in Abuja, disclosing that the forensic verification process is now near complete, and final settlements will be processed accordingly.

    Noting the high level of unethical and   illegal practices discovered during the verification of the FX backlog, Cardoso vowed any bank found to be involved in Foreign Exchange (FX) infractions under the new FX Code would face prompt, swift sanctions.

    He added that   Board Chairman and management of the bank’s must lead from the front in adhering to the code which provides new principles on ethical transparent FX transactions for Authorised Dealers.

    He said the era in which participants undertook unethical practices, taking advantage of the system,   the Nigerian economy and Nigerians was over.

    He said, “We must not forget where we are coming from. The era of multiple exchange rates, which created privileges for a select few at the expense of most Nigerians, severely   undermined market integrity.

    “As an example, the $7bn of FX backlogs that has taken over 12 months to verify has led to the discovery of multiple unethical and even illegal practices that we should not be proud of as a nation.

    “The forensic verification process is now near complete, and final settlements will be processed accordingly.

    “Similarly, the period of unprecedented ways-and-means-financing inflicted significant damage on our economy, contributing to inflation, currency depreciation, and eroded public confidence.

    “These practices must never return. The FX Code is a firm rejection of such distortions and an equally firm commitment to a future defined by fairness, trust and market-driven principles.

    “Board Chairs, Managing Directors, and Chief Compliance Officers – must lead from the front, embedding these standards within your organizations is not optional.

    “Let me reiterate: the era of opaque practices is over. We will not hesitate to act against any institution or individual that undermines the integrity of our financial markets.

    “The FX Code is a binding commitment to accountability and transparency and we must all play our part.”

    No longer business as usual

    Cardoso vowed it would no longer be business as usual, adding, “The FX Code represents a decisive step forward, setting clear and enforceable standards for ethical conduct, transparency, and good governance in our foreign exchange market. It is a firm signal that business-as-usual will no longer suffice.

    “Let us be clear: the system itself played a key role in the challenges of the past. Unethical behaviours and systemic abuses – whether by those with privileged access or by complicit participants – eroded public trust and harmed our economy.

    “We will not tolerate any attempts to revert to those practices. Any individual or institution that violates the FX Code will face swift and decisive sanctions.

    Reserves at $40.68

    He disclosed that the nation’s external reserves had grown by 12.74%, reaching $40.68 billion at the end of 2024, a development, he said, that reflected the effectiveness of reforms aimed at paying off legacy FX obligations and growing reserves organically.

    …It’s a call to action — Alawuba

    Also speaking at the launch of the Code,   Group Managing Director (GMD) of the United Bank for Africa (UBA), Oliver Alawuba, described the launch of the Code as, “a milestone that demonstrates our collective resolve to build a foreign exchange market rooted in transparency, professionalism, and ethical conduct.”

    According to him, “These initiatives have been pivotal in stabilizing the FX market, restoring investor confidence, and ensuring a more sustainable and resilient financial system. From policy innovations to strategic interventions, the CBN has proven itself a cornerstone of Nigeria’s economic stability.

    “The introduction of the Nigeria FX Code is yet another bold and visionary step. This initiative not only complements other notable reforms of the CBN, but also sets a new benchmark for accountability and integrity in the FX market. By embedding global best practices and fostering a culture of trust and equity, the Code will enhance market efficiency, attract greater participation, and elevate Nigeria’s standing in the global financial landscape.

    “This launch is not just the unveiling of a framework – it is a call to action for all stakeholders to uphold the principles of fairness, ethical behaviour, and professionalism. The strength of any financial market lies in the integrity of its participants, and with the Nigeria FX Code, we now have a unified platform to reinforce this commitment.”

  • CBN Governor Cardoso Defends Naira Float Policy to Restore Exchange Rate Credibility

    CBN Governor Cardoso Defends Naira Float Policy to Restore Exchange Rate Credibility

    Olayemi Cardoso, the Governor of the Central Bank of Nigeria (CBN), has explained that the decision to float the Nairain the foreign exchange market was a strategic move aimed at closing the gap between the official and parallel exchange rates, thus restoring market credibility.

    Cardoso made this statement over the weekend while addressing members of the Harvard Club of Nigeria in Lagos.

    Cardoso noted that his predecessors had considered floating the Naira but ultimately abandoned the idea, fearing massive depreciation and its ripple effects on the macroeconomic landscape.

    However, Cardoso, speaking for the first time since assuming office a year ago, said the floatation was necessary to tackle the speculative trading that thrived due to the disparity between the official and black market rates.

    “The decision to float the naira, although met with public criticism, was essential to align the official exchange rate with market reality. The disparity between the official and parallel rates encouraged arbitrage and speculation, eroding trust in the market,” Cardoso said.

    Cardoso acknowledged that the CBN’s credibility was at the core of its policy actions, adding that, “Without credibility, no policy, however well-intentioned, can succeed.”

    He stressed that the bold move was essential for addressing long-standing inefficiencies, adding that the speculative trading had reduced since the policy’s implementation, and gradual stability was returning to the currency markets.

    In his address titled “Leadership in Challenging Times: Restoring Credibility, Building Trust, and Containing Inflation,” Cardoso also highlighted the CBN’s efforts to control inflation, which remains a primary focus.

    He noted that the National Bureau of Statistics (NBS) reported recent declines in inflation for July and August 2024, indicating that the CBN’s actions were yielding positive results.

    Cardoso defended the CBN’s decision to raise the Monetary Policy Rate (MPR) to 27.25%, describing it as a “bold move” necessary to curb excess liquidity and rein in inflation. He added that, while higher interest rates were painful for borrowers, they were crucial for long-term economic stability.

    “Leadership is about making hard choices to secure long-term stability over short-term comfort in moments like these,” Cardoso said.