We’ll penalise dealers taking advantage of FX system, Cardoso warns

Olayemi Cardoso, governor of the Central Bank of Nigeria (CBN), says authorised dealers exploiting the foreign exchange (FX) system will be penalised.

Cardoso spoke on Thursday at the launch of the Nigeria Development Update (NDU) report in Abuja, pledging that the bank would implement policies that promote market efficiency.

He warned that the regulator would impose tougher sanctions on dealers found to be manipulating the FX system.

“The Central Bank does not determine the exchange rate. Exchange rates are determined by fundamentals,” Cardoso said.

“The Central Bank will work around the various policies that we bring out to ensure that the market functions efficiently, effectively, that nobody comes in to take advantage of the system and if they do, especially with respect to the authorised dealers, they will be sanctioned accordingly.

“That sanction, I can assure you, is getting tougher and tougher by the day. So it is making it less and less interesting for anybody who wants to go there and take advantage of our system.”

‘HIGHER INTEREST RATES CRUCIAL TO MAINTAINING NAIRA VALUE’

Cardoso also said confidence in the naira is gradually being restored due to the policies that have been implemented.

The CBN governor emphasised the importance of trust in the naira, noting that higher interest rates and tighter monetary policies are crucial to maintaining the value of the currency.

“People cannot keep holding on to local currency if they believe that their money will not maintain its value and for us, it is important to build that trust,” he said.

“You cannot expect anybody to have confidence in your currency if they do not trust you.”

He said the bank is making every effort to maintain consistency with its policies, while also being humble enough to address issues when things are not working as expected.

According to Cardoso, the bank is also focused on consistently communicating a clear and transparent message in its operations to help build and strengthen public trust.