"Nigeria Central Bank Head Cardoso says worst of Naira volatility is over"

" Nigeria Central Bank Head Cardoso says worst of Naira volatility is over \r\n\r\nNigeria\u2019s central bank Governor Olayemi Cardoso said the bank is \u201crelatively pleased\u201d with the progress it has made in stabilizing the naira and believes the excessive volatility may be a thing of the past.\r\n\r\n\u201cI do believe that we have more or less seen the worst in terms of volatility,\u201d Cardoso said in an interview with Bloomberg TV on Tuesday. \u201cWe are also very alive to observing the way and manner in which that market operates and ensuring that it gives the best value that that can be accomplished using certain tools,\u201d he said.\r\n\r\nSince taking the helm of the central bank of Africa\u2019s most populous nation in September, Cardoso has undertaken a series of steps to restore orthodox monetary policy aimed at confronting rampant inflation, attracting foreign inflows and stabilizing Nigeria\u2019s currency.\r\n\r\nInterest rates have been increased by 750 basis points this year to 26.25%, a foreign-exchange backlog has been cleared, and the country\u2019s exchange-rate policies have been overhauled \u2014 effectively devaluing the naira.\r\n\r\nThose policies have seen the naira trading in a narrow range between 1,473 and 1,490 per dollar this month, according to data compiled by Bloomberg. That has sent its 10-day rolling volatility to the lowest in at least a year and its 100-day swings to the least since January.\r\n\r\n\u201cWe\u2019re relatively pleased with where we are,\u201d Cardoso said. Even so, he said the central bank needs to do more. \u201cIt\u2019s continuous work in progress. And we will do everything possible to ensure that we continue to manage the macroeconomic fundamentals that affect that.\u201d\r\n\r\nThe steps have also seen the annual inflation rate that\u2019s remained stubbornly high \u2014 because of the currency devaluation, food insecurity and the removal of energy subsidies \u2014 rising at a slower pace. Consumer prices rose 34% last month, compared with 33.7% in April, suggesting that it\u2019s approaching a peak.\r\n\r\nThe governor refused to be drawn on whether this could signal the end to the tightening cycle that began in May 2022, when the central bank\u2019s monetary policy committee meets in mid-July.\r\n\r\n\u201cData will direct whether they see further hikes or not,\u201d he said. \u201cThe MPC has been very clear in stating that they see inflation as a major impediment for the future of Nigeria, and they will do everything possible to ensure that they keep inflation in check and in fact bring it down as reasonable as they can and I don\u2019t see that changing.\u201d\r\n\r\nThe central bank\u2019s steps and fiscal reforms have also helped the nation secure much needed liquidly. The World Bank earlier this month approved $2.25 billion in funding to support Nigeria\u2019s economic reforms helping boost its foreign exchange reserves.\r\n\r\nThe governor said the central bank would support further measures to build the country\u2019s reserves including a eurobond issue.\r\n\r\n\u201cWe should have a diversity of sources,\u201d Cardoso said. \u201cIt shouldn\u2019t just be the eurobond market, it shouldn\u2019t just be foreign portfolio investors, it should be a hodgepodge of different things.\u201d"

"Nigeria Central Bank Head Cardoso says worst of Naira volatility is over"

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