Emmanuel OchayiIn a revelation today, the Governor of the Central Bank of Nigeria (CBN), Mr. Cardoso, unveiled the tangible results of recent reforms initiated by the apex bank, underscoring a surge in liquidity within the foreign exchange market.
Addressing the House of Representatives, Mr. Cardoso heralded a significant milestone, stating, “As of yesterday, the volume of transactions in our market was over $800 million. This is the first time in many years it has achieved this level.” He emphasized the pivotal role of bold reforms currently underway across various economic sectors, expressing optimism about their transformative impact. “I’m confident that positive outcomes are already emerging and will become more apparent shortly,” he added.
The depreciation of the naira against the dollar, commencing from January 26th, has prompted strategic interventions by the central bank aimed at harmonizing the official market value with the parallel market rate. Despite hitting an intra-day high of N1526/$1 yesterday, the naira closed at N1,419.86/$ on the NAFEM window.
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One of the pivotal reforms spearheaded by the CBN involves the resolution of forex obligations backlog, with Mr. Cardoso affirming the settlement of $2.3 billion, leaving just $2.2 billion outstanding. Additionally, plans are underway to establish a centralized foreign currency gateway bank to streamline correspondent banking activities and incentivize individuals holding foreign currencies outside the formal banking system.
The scarcity of dollars in the domestic market, a critical factor contributing to the currency’s weakness, is being actively mitigated through measures such as encouraging Nigerians abroad to repatriate funds through official channels, with the overarching goal of stabilizing the currency.
The unfolding narrative of CBN reforms underscores a dynamic shift towards bolstering the resilience and competitiveness of Nigeria’s economic landscape, heralding a promising trajectory of growth and stability in the foreign exchange market.
