In a statement released on Friday, the Central Bank of Nigeria (CBN) revealed a significant influx of over $1.5 billion into the Nigerian economy in recent days, signaling the efficacy of its monetary policy measures.
Mrs. Sidi Ali, the Acting Director of the CBN’s Corporate Communications Department, highlighted that the influx of funds was a direct result of the bank’s concerted efforts to stabilize the foreign exchange market.
Ali emphasized that the naira’s performance in the Autonomous Foreign Exchange market also demonstrated positive momentum, with the currency trading at N1,309/$1 on Friday, a notable improvement from N1,611/$1 recorded in the second week of March 2024.
Describing the latest exchange rate as a step in the right direction, Ali reassured stakeholders that the CBN, under the leadership of Mr. Olayemi Cardoso, remained committed to ensuring market stability and appropriate valuation of the naira against major global currencies.
The CBN’s decision to harmonize the country’s exchange rate in June 2023 initially led to a depreciation of the naira to over 1,600/$1 at the official market.
Additionally, the CBN convened its 294th Monetary Policy Committee (MPC) meeting from Monday to Tuesday, during which it announced a two percent increase in the benchmark interest rate to 24.75 percent. This move followed a four percent increase in the lending rate to 22.75 percent in February.
Addressing concerns raised about the interest rate hike, Governor Olayemi Cardoso reiterated the CBN’s commitment to clearing all verified foreign exchange backlogs, thereby improving liquidity in the foreign exchange market. He also emphasized that the increase in interest rates was aimed at aligning with prevailing inflation rates in the country, with expectations that the adjustment would not be prolonged.
Cardoso emphasized the need for collaboration between monetary and fiscal policies to achieve sustainable economic stability, highlighting the importance of finding a balance that supports both monetary tightening and growth initiatives.
