Emmanuel OchayiThe Governor of the Central Bank of Nigeria (CBN), Dr. Olayemi Cardoso, has revealed a significant increase in foreign exchange (FX) inflows in the first quarter of 2024, marking a 136% rise compared to the total inflows recorded in 2023.
This milestone was shared during the Vanguard Economic Discourse in Lagos, themed ‘Reforms in The Era of Global Economic Uncertainties: Whither Nigeria’.
Represented by the Director of Risk, CBN, Blaise Ijebor, Dr. Cardoso emphasized the positive impact of the recent reforms on the FX market. “We remain committed to using all the orthodox monetary policy tools available to us to address inflation. We have also embarked on major reforms to liberalize the foreign exchange market, which has enhanced transparency, reduced arbitrage opportunities, promoted stability, and improved the liquidity in the market,” said Ijebor.
One of the key achievements highlighted by the CBN governor was the settlement of all valid FX forwards. “This was one of my commitments when I came on as governor of the Central Bank of Nigeria, and it has significantly improved the confidence of stakeholders. We are already seeing the result of these reforms in the growth of FX flows into the country,” he noted.
In a bid to further sanitize the forex system, the CBN has been active in issuing circulars and recently licensed 14 new International Money Transfer Operators (IMTOs). At the end of the Monetary Policy Committee meeting in Abuja, Dr. Cardoso expressed optimism about these measures, stating, “Our target, of course, is to double remittance flows within the year, and we have started that process to ensure that it happens.”
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Dr. Cardoso also addressed the broader economic context, acknowledging the challenges posed by global uncertainties. “The financial tightening that we have seen globally has been a result of monetary authorities taking steps to rein in inflation. This has had an impact on developing economies like ours, as investment flows have shifted back to safer markets due to concerns about risks and uncertainties,” he explained.
The governor highlighted the specific issues driving inflation in Nigeria, pointing to food inflation caused by rising transportation costs, infrastructure constraints, security challenges in food-producing areas, and the exchange rate impact on imported goods. “All of these factors have created uncertainty for businesses and homes,” he added.
Dr. Cardoso emphasized the need for a concerted effort to address these challenges. “Addressing these challenges requires a concerted effort of all stakeholders, especially the monetary and fiscal authorities, to work in harmony. We are always on the lookout for new ideas, new collaborations, or new ways to add value to our economy,” he said.
On the regulatory front, the CBN has developed revised guidelines for Bureau de Change (BDC) operations to ensure they play their intended role in the FX market. “We have also revoked the licenses of BDCs involved in unwholesome practices,” he said.
The governor reiterated the CBN’s commitment to increasing diaspora remittances into the economy via official channels to improve liquidity in the FX market. “We are confident that a good implementation of our reform programme will restore the economy to the path of inclusive and accelerated economic growth in the near term. Much work is still required, but let me assure you that the Central Bank of Nigeria will continue to enhance its efforts to deliver on its mandate of promoting monetary and price stability in Nigeria,” he assured.
As Nigeria navigates these economic challenges, the CBN’s proactive measures and reforms aim to stabilize the FX market, boost investor confidence, and ensure a more robust economic outlook for the country.
Emmanuel Ochayi is a journalist. He is a graduate of the University of Lagos, School of first choice and the nations pride. Emmanuel is keen on exploring writing angles in different areas, including Business, climate change, politics, Education, and others.
