Cardoso hints at reduced fuel prices in 2024, says ‘it’ll aid FX stability’

Olayemi Cardoso, governor of the Central Bank of (CBN), says fuel costs are expected to reduce in 2024, effectively impacting several segments of the economy.

Cardoso spoke on Wednesday at the unveiling of the Nigerian Economic Summit Group’s (NESG) 2024 macroeconomic outlook, in Lagos.

“The expected stabilisation or reduction in fuel costs is poised to have far-reaching implications across various sectors, contributing significantly to overall economic efficiency and resilience”, he said.

In addition, Cardoso said the country is expected to achieve stability in the foreign exchange (FX) market this year, attributable to the reduction in petroleum products imports.

The CBN governor spoke on the back of the commencement of production at the Dangote Petroleum Refinery, as well as the completion of the mechanical phase repairs of the Port Harcourt Refinery.

He said the apex bank will partner with the ministry of finance and the Nigerian Nigerian Petroleum Company (NNPC) Limited to ensure that “all our FX inflows are returned to the central bank”.

“These coordinated efforts will greatly enhance the bank’s FX inflows and contribute to the appreciation of reserves,” Cardoso said.

“The expected stability in the foreign exchange market for 2024 can be attributed to the reduction in petroleum products imports and the recent implementation of a market determined foreign exchange rate policy by the CBN.

“The reform is designed to streamline and unify multiple exchange rates, fostering transparency and reducing opportunities for arbitrage.”

According to the apex bank governor, the resulting consistent and stable exchange rate will not only boost investor confidence but also attract foreign investments, elevating Nigeria’s appeal to global investors.

“We are implementing a comprehensive strategy to improve liquidity in our FX market in the short, medium, and long-term. Our focus is on addressing fundamental issues that have hindered the effective operation of our markets over the years,” he said.

‘WE’LL CLEAR FX BACKLOG’
Cardoso also said upholding the integrity of financial markets is crucial for building confidence.

“With the completion of an independent comprehensive forensic review, we are addressing the backlog of valid FX transactions and we remain steadfast in our commitment to decisively address any infractions or abuses,” he said.

The CBN governor had earlier said the naira is currently undervalued.