Naira Crisis: CBN Governor Faces Senate Over Economic Woes

The Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso, is meeting with the Senate Committee on Banking, Insurance and Financial Institutions today, according to DAILY POST. The session is expected to address the economic challenges facing the country, especially the depreciation of the Naira and the high inflation rate.

Cardoso, who was accompanied by other CBN officials, arrived at the Red Chambers on Friday morning, amid growing public discontent over the rising cost of living and hardship. This is his second appearance before the National Assembly this week, as he had earlier briefed the House of Representatives on Wednesday about the foreign exchange crisis and the measures taken by the CBN to stabilize the Naira.

The CBN governor attributed the pressure on the Naira to the high demand for foreign currency by Nigerians who travel abroad for medical and education purposes. He also cited the impact of the COVID-19 pandemic and the global oil price volatility on the country’s external reserves and exchange rate.

Despite the CBN’s recent policy interventions, such as the introduction of the Naira 4 Dollar Scheme and the adjustment of the official exchange rate, the Naira continued to lose value against the US dollar at the parallel market. As of Thursday, the Naira traded at N1479.47 per US dollar, according to FMDQ data, while the official rate was N410.25 per US dollar.

The CBN also announced last week that it had revised the FMDQ FX Market Rate Pricing Methodology and issued a Financial Markets Price Transparency and Market Notice to enhance the efficiency and transparency of the foreign exchange market. The CBN said these reforms were aimed at improving the liquidity and stability of the Naira and boosting investor confidence.