The Central Bank of Nigeria (CBN) has disclosed that the Nigerian economy witnessed $1.5 billion foreign exchange inflow into the country, two days after the Monetary Policy Committee (MPC) meeting.
By this development, the CBN is optimistic about the health of the foreign exchange market in Nigeria.
This positive development, according to the CBN, is a direct result of its ongoing monetary policy efforts.
Mrs. Hakama Sidi Ali, Acting Director of Corporate Communications for the CBN, stated that data shows that the inflows stemmed from the CBN’s initiatives to stabilize the foreign exchange market.
This stabilization is reflected in the Naira’s appreciation within the Autonomous Foreign Exchange (AFEX) market. As of Thursday, March 28th, 2024, the Naira traded at N1,309/$1, a significant improvement compared to N1,611/$1 in the second week of March.
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While acknowledging the positive trend, Mrs. Ali emphasized the CBN’s unwavering commitment to maintaining exchange rate stability and ensuring the Naira reflects its appropriate value against other major global currencies.
This development she noted “aligns with Governor Olayemi Cardoso’s recent pronouncements following the Monetary Policy Committee (MPC) meeting on March 26th, 2024”.
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The MPC meeting resulted in a two-percent increase in the benchmark interest rate, rising from 22.75% to 24.75%.
Governor Cardoso also confirmed the clearance of all verified foreign exchange backlogs, a move intended to improve liquidity within the market.
Additionally, on Wednesday, March 27th, the CBN conducted a Nigerian Treasury Bills (NTBs) auction of N1.64 trillion, “at stop rates of 16.24 percent, 17 percent, and 21.124 percent for the 91-day, 182-day, and 364-day tenors, respectively”.
The CBN’s recent actions, coupled with the reported foreign exchange inflows, suggest a multi-pronged approach to address market concerns and foster stability. While the Naira’s appreciation is a positive sign, the CBN acknowledges the need for continued vigilance and a commitment to sound monetary policies.
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