Naira loses over half of its value in the present CBN’s Gov. one year in office

The Naira has lost over half of its value in one year since Yemi Cardoso assumed office as the Governor of the Central Bank of Nigeria (CBN).
According to data from the FMDQ, the value of the local currency dropped from N747.76/$1 on September 22, 2023, to N1,541.52/$1 as of September 20, 2024, representing a 51.49% depreciation.
This decline in the value of the naira has occurred amid efforts by the CBN to stabilize the currency, including a notable increase in Nigeria’s foreign exchange (forex) reserves.
Nigeria’s foreign exchange (FX) reserves grew by 12% over the past year, rising from $33.28 billion on September 22, 2023, to $37.39 billion on September 19, 2024, reaching its highest level under the administration of Bola Tinubu.
This $4.12 billion increase in reserves signals efforts by the CBN to shore up liquidity in the forex market and manage external shocks.
However, this growth in reserves has not been sufficient to curb the sharp depreciation of the naira, which continues to struggle under external pressures and internal fiscal imbalances.
Yemi Cardoso, who took over the leadership of the CBN on September 22, 2023, has introduced several policies aimed at combating inflation, strengthening the local currency, and promoting transparency within the market.
However, these reforms have yet to yield the intended stabilization, as the naira’s depreciation highlights ongoing challenges in managing the nation’s currency.
While the increase in FX reserves is a positive signal for liquidity management, the growing gap between supply and demand in the forex market, combined with high inflation and wavering investor confidence, continues to exert pressure on the naira.
Speaking with Nairametrics on Sunday, a development economist, Dr Aliyu Ilias, described Cardoso’s approach as “topsy-turvy”, which has yet to yield significant results.
On the decelerated inflation rate, he said “What we saw recently in terms of reduction in inflation is too marginal. Also, it is the harvest period that has led to the drop.”
Rating the CBN governor, Ilias added: “He is sacrificing growth because he wants to reduce inflation. I will score him below average. He needs to do more and be more strategic with his approach.”
However, a financial analyst and founding partner at McBrain & Company, Brain Essien, told Nairametrics that: “he (Cardoso) hasn’t done too bad. Cardoso was handed an economy that was sickly.”
He added: “His objective was inflation-targeting, and so far so good, we have had two consecutive decelerated inflation, which is good.”
Essien further urged the CBN to stop dollarisation in the country and make the naira a focal point of the economy.
Essien also recommended that the CBN’s MPC retain the current MPR of 26.75%, as increasing or decreasing it may have more consequential impact, especially if such an adjustment exceeds +/- 25 basis points.

Source: nairametrics

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