Olayemi Cardoso, governor of the Central Bank of Nigeria (CBN), says the countrys foreign exchange (FX) market is now recording an average daily turnover of $500 million, often without the CBN needing to intervene. Cardoso spoke at a press briefing after the 303rd monetary policy committee meeting in Abuja on Tuesday, noting that Nigeria now operates a system driven by willing buyers and willing sellers, with transparent processes that show who is buying and who is selling at any given time. What we have in the foreign exchange market in Nigeria today is something that has not happened before, he said. In the sense that you have a market where there are willing buyers, willing sellers. They come in, they buy at will, they sell at will, and you have a process that is open and very transparent. He explained that the electronic foreign exchange matching system (EFEMS) introduced by the apex bank has boosted confidence, contributing to the growing volume and stability in the market. It is for that reason that, on average, on a daily basis, we have half a billion dollars in turnover, in market activity, with many times the CBN not being a participant in that market, he said. Cardoso added that the old era in which if the CBN does not intervene, nothing happens is now over, stressing that the market now operates by agreed rules and transparency, which has helped to stabilise the system. He also said FX rate differentials, once as wide as 60 percent, have narrowed to about 2 percent because of improved openness. Everybody has equal access to a market that has become very open and very transparent, he said. According to him, discipline in the FX market has improved due to policy consistency and the absence of flip-flops that previously caused distortions. Cardoso said the reforms have made Nigerias FX market more functional and restored confidence among market participants.
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