Cardoso: Coordinated monetary, fiscal policies crucial in achieving economic stability

Olayemi Cardoso, governor of the Central Bank of Nigeria (CBN), says coordinated monetary and fiscal policies are crucial in achieving economic stability.

Speaking on Tuesday during an interview with Bloomberg, Cardoso said the collaboration is essential for managing the macroeconomic fundamentals that influence the market, aiming to provide the best value for the naira.

The governor pointed out a slowdown in the month-on-month inflation rates, describing it as a positive sign.

He assured that the monetary policy committee (MPC) members are vigilant in monitoring inflation trends and ensuring a moderation of inflation numbers.

“MPC members will continue to monitor the trajectory and are determined to ensure that they put inflation under control,” Cardoso said.

Cardoso expressed optimism about recent improvements in liquidity and the return of confidence to the market while noting a period of stability after previous volatility in the foreign exchange (FX) market.

He attributed the stability to increased liquidity and a more composed approach from market participants on both the buying and selling sides.

“In the past, people were panicking and front-loading their requests, now, a lot of that has calmed down. There is no inclination to do that because liquidity has returned to the market,” he said.

He also emphasised the significant achievement of merging different exchange rates into a unified system, adding that a predictable exchange rate is important for economic planning and investment.

The governor expressed confidence in the current market dynamics, where willing buyers and sellers operate freely, adding that this has also contributed to the stability of the naira.

Cardoso, however, said continuous observation and management are necessary to ensure the market benefits all participants.