Olayemi Cardoso, the governor of the Central Bank of Nigeria, has reaffirmed that the naira has seen the worst of sharp volatility and is now in calm waters.
“A lot of the wide swings are attributed to distortion in the system, but we are beginning to smoothen out as a result of better understanding of the market, transparency and doing things right,” Cardoso said.
Read also: Naira loses across FX markets despite improved liquidity
Cardoso disclosed this at the CEO Forum 2024 themed, “Leadership in the Economic Times”, organised by BusinessDay.
He said there was a lot of distortion in the system, such as illicit flow, and people not abiding by the rules, and it was very important to address it. “Initially, we found that there was pushback when we began doing things the right way. We saw a lot of market participant frontload their request.”
“It is important for people on that side to understand that we are going to be consistent in doing what we are doing for the market to function smoothly.”
On bank recapitalisation and omission of retained earnings, said this will open the banks to providing different services to the populace as opposed to aggregating in one particular area, with respect to retained earnings, it helps to build comparability.
“Retained earnings are easily determinable and help for comparability. We must move to a more transparent system within the banking system,” he said.
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He highlighted that banks have had more than enough time to prepare, as they were given a two-year timeline.
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