The governor of the Central Bank of Nigeria, Yemi Cardoso, has said the bank will publish robust policy documentation on what the rules of the foreign exchange market operation will be in the coming weeks.
He disclosed this at the ongoing National Economic Summit in Abuja.
“We will come out with something that is representative of the true market because the market will adjust to some of these things over time. I’m happy to be frank,” Cardoso stated.
The CBN head also pointed out that there will no longer be flip-flop policy decisions in the foreign exchange market.
According to him, the market will now be predictable, and transparent and provide a level playing field for all interested investors and participants.
He decried the lack of transparency in the FX market, which he pointed out, had resulted in a trust deficit on the part of the investors.
“The attempt at the unification of the foreign exchange market is not by any means perfect; at least substantially more revenue has come in. The combination of those two things, in addition to some of the efforts that have been made on the fiscal side, is commendable.
“And in due course, we will see the outcome. There are more difficult decisions to be made, but two very difficult decisions have been made. Now, it’s a question of managing things to get to where we want to get to. And that is where we want to get to be a place where we have FX that is fixed for purpose. A FX that works for everybody. A FX market where you know the rules. A foreign exchange market where there are no policy flip-flops. An FX market that you can predict. That is what we do.
“If we’re going to create an ecosystem that will survive us all, we’ve got to do some basic things, some of which we are already attempting to do. For example, we do need to have a situation where the rules are clear to all that engage in that business, and we are going to come with that.”
Cardoso, who said Nigeria was bleeding out its resources during the regime of subsidy, expressed happiness that the removal of subsidy had put an end to the economic haemorrhage in the country.
While noting the challenges the removal of fuel subsidy had brought, he said Nigerians have no reason to be anxious over the state of the nation since the thing responsible for the “fiscal bleeding” of the economy, namely subsidy, has been removed.
The CBN boss also noted that since the removal of fuel subsidy Nigeria has witnessed a substantial increase in revenue generation in the foreign exchange market, highlighting that Nigeria is now on the oath of rebuilding its economy.
“The bleeding concerning Nigeria’s resources has stopped. I refer specifically to the subsidy. When people say they’re concerned, I get it. But frankly, I think that was the time to be concerned. Right now, from what I can see, we are on the path of rebuilding and that is so important for us on the monetary side.
“If the fiscal is bleeding, it makes life very difficult for us on the monetary side. To the extent that that has stopped is a big deal. It isn’t anything for anybody to take lightly.”
Cardoso further pointed out that Nigeria is witnessing an increase in interest in foreign portfolio investment since the FX reforms, adding that confidence has been restored in the Nigerian market.
“We have an enormous amount of interest from foreign portfolio investors, pips stakeholders who really and truly are interested in continuing to engage with Nigeria. The reason, of course, is that they can see where this is all going. I just want to say you’re going to find a Central Bank going forward that would take its objective of price stability very seriously indeed,” he added.