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Naira Defence not Responsible for Drop in FX Reserves – Cardoso

Central Bank of Nigeria (CBN) Governor, Yemi Cardoso, on Wednesday explained the reasons why the country’s foreign exchange reserves dipped in recent months, saying it was not an attempt to defend the naira but to boost FX liquidity in the Bureau De Change segment of the foreign exchange market. The FX reserves dropped to $32 billion on Wednesday, in what many commentators said was a worrisome development that needed to be explained to avoid panic.

But Cardoso, at an interface with the media and other stakeholders at the ongoing IMF-World Bank Spring Meetings in Washington DC, said there was no cause for alarm as the nation’s economic ship was sailing in the right direction. According to him, what the CBN has done to make the naira stronger is what many other jurisdictions have done, which is to step in and attain stability in a place volatility hitherto reigned. “It is not our intention to defend the naira. Much as I have read in recent days as regards about what’s in our reserves, it’s not that real thing. If you think back to our overall strategy, you will know we’re running a willing buyer, willing seller market.”

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