Nigeria’s Senate Approves New Central Bank Governor Amid Currency Crisis

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Nigeria’s Senate has unanimously approved the new appointment of Olayemi Cardoso as the country’s central bank governor, along with four deputies. Cardoso, a former Citi executive and ally of President Bola Tinubu, takes over from former bank chief Godwin Emefiele. The new governor’s primary challenge is stabilizing the country’s currency, the naira, which has recently plummeted to record lows against the US dollar. Tinubu had previously taken steps to align official and parallel market exchange rates, but the currency has continued to deteriorate.

Traders in Nigeria’s parallel market say the central bank has not intervened in recent weeks, leading to a chronic shortage of foreign exchange. The finance minister blames the central bank’s $6.8 billion debt in the foreign exchange market for the weakening currency. The government is working to attract liquidity from foreign investors, including a $3 billion loan scheme from the African Export-Import Bank. Additionally, the central bank faces pressure to control the country’s 25% inflation rate. Cardoso emphasizes the need for evidence-based monetary policy and intends to limit the bank’s involvement in development financing.

In summary, the Senate has approved Olayemi Cardoso’s appointment as the new central bank governor of Nigeria, along with four deputies. Cardoso’s main task is to stabilize the country’s weakening currency, the naira, which has hit record lows against the US dollar. The central bank’s lack of intervention has led to a shortage of foreign exchange, and efforts to attract liquidity from foreign investors have yet to materialize. The bank also faces pressure to combat the country’s high inflation rate. Cardoso aims to steer the central bank towards evidence-based monetary policy and a more limited role in development financing.

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