Former Emir of Kano, Muhammad Sanusi, has disclosed the mechanisms through which the Central Bank of Nigeria (CBN) contributed to the weakening of the naira.
Sanusi attributed the depreciation of the currency to the CBN’s lending practices to the federal government during the tenure of former President Muhammadu Buhari, employing what is known as “ways and means.”
Addressing attendees at MTN Capital Markets Day on Tuesday, Sanusi highlighted that the CBN’s approach to supporting the government triggered inflationary pressures in Nigeria, leading to the decline in the value of the naira.
He pointed out that the central bank utilized aggressive monetary tightening, employing various liquidity control instruments such as open market operations, Open Buy Back (OBB), and maintaining high T-bill rates.
Sanusi explained that these measures underscored the CBN’s commitment to its core objectives of ensuring financial system stability and managing inflation.
Expressing his perspective on the situation, he stated, “I am optimistic, especially in the short term. We’ve had eight years of rapid expansion of the central bank’s balance sheet through ways and means.
And that has fueled inflation and weakened the currency. And that is a fact.”
