In a bid to address the grappling economic challenges facing the nation, the Central Bank governor, Olayemi Cardoso, Friday, appeared before the Joint Senate Committee on Finance, Banking, Insurance, and Other Financial Institutions and National Planning, at the National Assembly to proffer solutions.
While addressing the lawmakers and key stakeholders, Cardoso underscored the urgency of the matter, acknowledging the widespread impact of inflationary pressures and exchange rate volatility on communities nationwide as he also assured stakeholders of the central bank’s unwavering commitment to collaborating with government entities to implement lasting solutions.
Highlighting recent economic data, Governor Cardoso revealed a surge in headline inflation to 28.92% in December 2023, driven by factors such as food shortages, distribution challenges, and heightened consumer demand during the festive season. He attributed the upward trend in food inflation to supply shocks stemming from insecurity, climate-induced events, and importation bottlenecks. However, he expressed optimism in the efforts of the emergency committee on food security and the central bank’s monetary policy tightening measures to mitigate these challenges.
He also expressed concerns regarding exchange rate volatility, citing increased demand pressures and capital outflows as contributing factors.
Cardoso said a comprehensive strategy aimed at enhancing liquidity in the foreign exchange market, including unifying market segments, clearing outstanding obligations, and adjusting operational mechanisms for key players.
He emphasized the importance of moderating demand for foreign exchange and highlighted the necessity of collaboration between fiscal and monetary authorities to stabilize the exchange rate effectively.
He equally commended the ongoing collaboration between fiscal and monetary authorities, particularly with key ministries such as finance, budget, and agriculture; stating that while economic challenges may persist in the short term, the implemented measures will address fundamental issues and pave the way for sustainable economic growth and prosperity.
