More scarcity ahead as CBN moves to mop up cash to tame inflation, strengthen Naira

The governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, said on Friday, November 25, 2023, that the bank will introduce a set of foreign exchange rules to address the naira crash and achieve exchange rate stability.

Cardoso said the bank would conduct a new round of recapitalization exercises for the banking industry by asking banks to increase their minimum capital base to a new level to support the vision of a $1 trillion economy proposed by President Bola Tinubu.

New licensing guidelines coming for banks, fintech firms

The CBN boss disclosed this in Lagos during his keynote speech at the 2023 Annual Bankers Dinner of the Chattered Institute of Bankers of Nigeria (CIBN).

He said the the apex bank will introduce new licensing guidelines for fintech and payment banks, cautioning that operators engaging in activities outside their licenses will be sanctioned.

Vanguard reports that Cardoso said the bank will tighten the money supply for the next two quarters to curtail the challenge of surging inflation, adding that it will conduct another round of liquidity mop-up to reduce excess cash in the system.

Cardoso said: “Our monetary policies will achieve price stability, foster sustainable economic growth, stabilize the Naira exchange rate, and reduce interest rates to facilitate borrowing and investments in the real sector.

"Clear, transparent, and harmonized rules governing market operations are essential to ensure the proper functioning of domestic and foreign currency markets.

“New foreign exchange guidelines and legislation will be developed, and extensive consultations will be conducted with banks and FX market operators before implementing new requirements.