“Floating the naira, a decision met with considerable public criticism, was necessary to bring the official exchange rate closer to market reality.” - CBN Governor, Mr Olayemi Cardoso

The Governor of the Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso, has asserted that under his leadership, the bank made a decisive move to float the Naira in the foreign exchange market. This initiative aims to align the official exchange rate more closely with market conditions.

During a weekend discussion on the theme "Leadership in Challenging Times: Restoring Credibility, Building Trust, and Containing Inflation," Cardoso emphasized that when he took office, he recognized that the foundation of the decisions made by him and his team needed to be the credibility of the Central Bank of Nigeria (CBN).

He said, “Without credibility, no policy, however well-intentioned, can succeed. Floating the naira, a decision met with considerable public criticism, was necessary to bring the official exchange rate closer to market reality. ‘‘The disparity between the official and parallel rates had encouraged arbitrage and speculation, eroding trust in the market.

“Credibility is earned by consistency. The decision to close this gap, while painful in the short term, sent a message to market participants that the CBN was committed to transparency and sound monetary policy.

“Our decision to raise the Monetary Policy Rate (MPR) to 27.25% was a bold move. Higher interest rates, while painful for borrowers, are necessary to curb excess money in circulation and control inflation. Leadership is about making hard choices to secure long-term stability over short-term comfort in moments like these.’’