Nigeria: CBN Reports Influx of Over $1.5 Billion into Nigerian Economy, Citing Effective Monetary Policies

The Central Bank of Nigeria (CBN) has revealed that the Nigerian economy experienced a substantial inflow of over $1.5 billion in recent days, signaling the effectiveness of its monetary policy measures.

Mrs. Sidi Ali, Acting Director of the CBN’s Corporate Communications Department, made this disclosure in a statement provided to Saturday PUNCH on Friday.

According to Ali, data available to the bank indicates that these inflows are a result of its concerted efforts to stabilize the foreign exchange market.

She further highlighted that the Nigerian Naira has continued to strengthen in the Autonomous Foreign Exchange market, trading at N1,309 per dollar on Friday, compared to N1,611 per dollar in the second week of March 2024.

Ali emphasized that Thursday’s exchange rate demonstrates the Naira’s positive trajectory and affirmed the commitment of the Cardoso-led CBN to maintain market stability and ensure the appropriate valuation of the Naira against major global currencies.

The CBN initiated the harmonization of the country’s exchange rate on June 14, 2023, which led to the Naira weakening to over 1,600 per dollar at the official market.

In addition, the CBN recently concluded its 294th Monetary Policy Committee (MPC) meeting from Monday to Tuesday, during which it raised the benchmark interest rate by two percent to 24.75 percent. This adjustment follows a previous increase of four percent in February, raising concerns among citizens and economic experts.

In a post-meeting briefing, CBN Governor, Mr. Olayemi Cardoso, reiterated the bank’s clearance of all verified foreign exchange backlog, indicating an improvement in liquidity in the foreign exchange market.

Furthermore, the CBN conducted a Treasury Bills auction of N1.64 trillion on Wednesday, with stop rates of 16.24 percent, 17 percent, and 21.124 percent for the 91-day, 182-day, and 364-day tenors, respectively.

Explaining the decision to raise the interest rate, Governor Cardoso highlighted its aim to stabilize the economy by aligning the interest rate with the prevailing inflation rate. He assured that the increase is not intended to be prolonged, expressing optimism about the moderation of exchange rates and sustainability in the future. He emphasized the need for collaboration with fiscal authorities to achieve lasting economic stability.