CBN Governor To Suspend Intervention Loans, Clear Dollar Debts

The new Governor of the Central Bank of Nigeria CBN, Olayemi Cardoso, has said he will prioritise clearing the apex bank’s backlog of unsettled foreign exchange obligations in the near term.

Cardoso started this on Tuesday during the screening session of members of the Senate.

He promised to enhance transparency, fix corporate governance, and ensure confidence in the autonomy and integrity of the bank.

According to him, “We need to promptly find a way to take care of that. It would be naive for us to expect that we’ll be making too much progress if we’re not able to handle that side of the foreign exchange market.”

READ: Cardoso Promises To Address Forex Stalemate And Other Newspaper Headlines

The new CBN governor said he would maintain price stability, revert to evidence-based monetary policies, and discontinue his predecessor’s unorthodox monetary policies to bolster the country’s naira currency.

Cardoso’s screening as the nation grapples with falling economic indices with the naira nearing 1,000/$ at the parallel market.

The official market closed with the naira-to-dollar exchange rate settling at N755.08/$1 on Tuesday, according to the foreign exchange data released by the FMDQ Exchange

According to Cardoso, the immediate plan to stabilise the naira will be for the apex bank to settle existing financial obligations and make “transparent rules.”

Describing how to address what he termed as an ‘operational issue’, he said, “Right now, we have a situation where we are aware that there are unsettled obligations by the CBN. Whether it is $4bn, $5bn or $7bn, I don’t know but definitely the immediate priority will be to verify the authenticity and extent of what is owed.

“Number two, apart from the operational issue, there is one that is system related that involves ensuring that we come up with rules that are open, transparent that any of the players in that area understands. We can’t expect foreign investors and portfolio investors to come; we can’t expect them if there is no open, transparent system that everyone understands.

“In setting up those guidelines one will carry the relevant stakeholders along and the comment was made earlier that one should be ready to engage everybody and hear views. Those two things, though they may seem simple, will go a long way to easing up the restrictions we are having on people (investors) that want to come in.”

The immediate past acting CBN Governor, Folashodun Shonubi, on September 6, 2023, said the apex bank had concluded negotiation on dollar debts with commercial banks, disclosing that all forex exchange backlogs would be cleared within one to two weeks.

• Yusuf Oketola