• Thursday, May 23, 2024
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Naira fall continues after Cardoso becomes acting CBN governor

Naira on Friday maintained a steady fall against the dollar across foreign exchange (FX) market, after Olayemi Cardoso assumed duty as the acting governor of the Central Bank of Nigeria (CBN).

Naira fell to an all-time low of N995 per dollar, losing 0.51 percent of its value compared to N990/$1 on Thursday at the parallel market, also known as black market.

With the current exchange rate, naira has year-to-date weakened by 34.82 percent from N738 per dollar at the beginning of the year.

At the Investors’ and Exporters’ (I&E) forex window, Nigeria’s official foreign exchange market, naira depreciated by 1.32 percent as one dollar was quoted at N747.76 on Friday as against N738.00/$1 quoted on Thursday.

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The continued naira depreciation has been attributed to strong demand for the greenback. Also, fiscal policies, external trade, and global market trends, including inflation rates, interest rates, policy events, and geopolitical factors, are key influencers affecting the Naira’s performance, according to Stears Africa FX Monitor, a data and intelligence company.

On Thursday, Nigeria’s Central Bank postponed a rate-setting meeting, known as the Monetary Policy Committee (MPC) scheduled for Sept 25-26.

A statement from the apex bank on Friday noted that Cardoso, who was recently nominated by President Bola Ahmed Tinubu, formally assumed duty, in an acting capacity, as the Governor of the CBN, pending his confirmation by the Senate.

This followed the resignation of Godwin Emefiele as Governor of the Central Bank. The statement signed by Isa AbdulMumin, director corporate communications, said the deputy governors designate have also assumed duty, in acting capacities, sequel to the formal resignation of Folashodun Shonubi, Aishah Ahmad, Edward Lametek Adamu, and Kingsley Obiora as deputy governors of the CBN.

Many Nigerians have been asking if the MPC will hold now that Cardoso has assumed duty as the acting CBN governor.

“I don’t think they will fox the meeting till they have had some time to understand what is going on so I suspect not till next month,” said Yemi Kale, partner & chief economist, KPMG Nigeria,

He said, “I don’t think the FX market will react in any way as nothing has changed. It’s not the CBN management that is causing FX issues but supply and a new administration does not automatically create supply. The market will wait and watch.”

Ayodele Akinwunmi, relationship manager, corporate banking at FSDH Merchant Bank Limited, said the value of the Naira will appreciate if there is increased Dollar supply in the market.

“Increased Dollar supply can only happen when more Dollars come into Nigeria than it leaves, ” he said.

Aminu Gwadabe, national president of Association of Bureaux De Change Operators of Nigeria (ABCON) said the appointment of the new CBN governor and his deputies’ resumption of office will settle the concerns of substantive leadership at the helm of the apex bank for timely and effective decision making and implementation.

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“This will usher in clarity and effective governance. To avoid a vacuum in the monthly meeting of the monetary policy committees of the apex bank the new CBN management must hold a meeting, he said.

“In line with the usual expectations of calmness in any new leadership change, it suffices to note that the actions or inactions of the new management team will have a very strong impact on the fragile foreign exchange market and many other economic fundamentals.

“It is therefore expedient for the new management team to hit the ground running. And we always pray for God’s guidance and wisdom in their new assignments while accepting our best assurances and cooperation,” Gwadabe said.