Emmanuel OchayiThe Central Bank of Nigeria (CBN) has announced an inflow of over $1.5 billion into the economy, signaling positive outcomes from its monetary policy efforts.
Mrs. Sidi Ali, the acting Director of the Corporate Communications Department at CBN, stated that these inflows reflect the bank’s continuous commitment to stabilize the foreign exchange market.
“The data available to us indicates a noteworthy influx into the economy, primarily attributed to our efforts aimed at ensuring foreign exchange market stability,” said Ali.
Highlighting the positive trend, Ali pointed out that the naira has witnessed steady gains in the Autonomous Foreign Exchange market, trading at N1,309/$1 compared to N1,611/$1 in the second week of March 2024. This appreciation underscores the effectiveness of the CBN’s measures in bolstering the national currency.
The exchange rate between the naira and the dollar closed at N1,534/$1 on the official Nigerian Autonomous Foreign Exchange Market (NAFEM) on February 12, 2024. The current strengthening of the naira indicates a significant improvement.
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In its recent 294th Monetary Policy Committee meeting, the CBN decided to raise the interest rate by 200 points to 24.75 percent from the previous 22.75 percent. Governor Olayemi Cardoso reiterated the bank’s commitment to addressing verified foreign exchange backlogs, emphasizing an anticipated improvement in liquidity in the forex market.
Speaking on the decision to hike interest rates, Governor Cardoso clarified that it aimed to align the interest rate with the prevailing inflation rate in the country. He assured that this increase would not be prolonged and stressed the importance of collaboration with fiscal authorities for sustainable economic stability.
“The increase in interest rates, although it may pose challenges to the economy, is balanced by the reduction in the foreign exchange rate, contributing to overall moderation,” Governor Cardoso explained.
The CBN conducted a Nigerian Treasury Bills auction totaling N1.64 trillion, with stop rates ranging from 16.24 percent to 21.124 percent for various tenors.
Ali affirmed the CBN’s commitment to market stability and ensuring appropriate pricing of the naira against other major currencies globally, citing Thursday’s exchange rate as a positive indication of the currency’s trajectory.
With these developments, the CBN continues to demonstrate its dedication to fostering a robust and stable economic environment, characterized by favorable foreign exchange dynamics and prudent monetary policies.
