Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso, emphasized the importance of trust in central banking during a speech to the Harvard Club of Nigeria in Lagos.
“Trust is the currency of central banking. If the public loses trust in the institution, the efficacy of its policies diminishes,” Cardoso stated.
The CBN’s Electronic Foreign Exchange Matching System (EFEMS) aims to enhance transparency and provide accurate oversight of foreign exchange transactions, sending “a strong signal that the CBN is serious about fair and efficient markets.”
Cardoso reflected on his first year as governor, highlighting difficult decisions made to restore credibility and contain inflation. “Leadership…often requires making difficult and sometimes unpopular decisions,” he noted.
On the decision to float the naira, Cardoso explained, “Credibility is earned by consistency…The decision to close this gap sent a message to market participants that the CBN was committed to transparency and sound monetary policy.”
Regarding inflation control, Cardoso acknowledged the CBN hasn’t met its target but pointed to recent declines as progress. “Our decision to raise the Monetary Policy Rate to 27.25% was a bold move…necessary to curb excess money in circulation and control inflation.”
Cardoso emphasized effective communication and focus on core objectives as key leadership lessons.
“Trust is built on the belief that a central bank will take necessary steps to ensure economic stability, even when those steps are uncomfortable or politically contentious.”, he noted.
