The Central Bank of Nigeria (CBN) has announced a significant boost to the Nigerian economy with a $1.5 billion foreign exchange inflow just two days after the Monetary Policy Committee (MPC) meeting. This inflow indicates a positive outlook for the foreign exchange market in Nigeria.
According to Mrs. Hakama Sidi Ali, Acting Director of Corporate Communications at the CBN, this influx is a direct result of the CBN’s strategic monetary policies aimed at stabilizing the foreign exchange market. The impact of these policies is evident in the Naira’s strengthening within the Autonomous Foreign Exchange (AFEX) market. As of March 28th, 2024, the Naira traded at N1,309/$1, showing a notable improvement compared to N1,611/$1 earlier in March.
Mrs. Ali reiterated the CBN’s commitment to maintaining exchange rate stability and ensuring the Naira’s value reflects accurately against major global currencies. She highlighted that these efforts align with Governor Olayemi Cardoso’s recent directives following the MPC meeting.
Governor Cardoso, during the MPC meeting, announced a 2% increase in the benchmark interest rate, now at 24.75% from 22.75%. The clearance of all verified foreign exchange backlogs was also confirmed, aiming to enhance market liquidity.
Additionally, the CBN conducted a Nigerian Treasury Bills (NTBs) auction worth N1.64 trillion on March 27th, with stop rates of 16.24%, 17%, and 21.124% for the 91-day, 182-day, and 364-day tenors, respectively.
These recent actions by the CBN, combined with the substantial forex inflows, indicate a comprehensive approach to address market challenges and promote stability. While the Naira’s appreciation is encouraging, the CBN remains vigilant, emphasizing the importance of sound monetary policies for sustained economic growth.
