Economy Records Over $1.5bn Inflow in Days – CBN

The Central Bank of Nigeria has disclosed that over $1.5bn came into the Nigerian economy over the past few days, indicating that its monetary policy efforts are effective.

The CBN’s Acting Director of Corporate Communications Department, Mrs Sidi Ali, disclosed this in a statement on Friday.

She noted that data available to the bank indicated that the inflows resulted from its  concerted effort to stabilise the foreign exchange market.

According to Ali, the naira has also continued to record gains in the Autonomous Foreign Exchange market as it traded at N1,309/$1 on Friday against N1,611/$1 in the second week of March 2024.

While noting that Thursday’s rate signified that the naira was headed in the right direction, Ali assured that the Cardoso-led CBN would remain committed to ensuring the stability of the market and the appropriate pricing of the Naira against other major currencies worldwide.

The CBN harmonised the country’s exchange rate on June 14, 2023, causing naira to weaken to over 1,600/$ at the official market.

Meanwhile, the CBN held its 294th MPC meeting Monday to Tuesday, where it raised the benchmark  interest rate by two per cent to 24.75 per cent.

It had previously reviewed the lending rate by four per cent to 22.75 per cent in February.

During his post-meeting briefing, the CBN Governor, Mr Olayemi Cardoso, reiterated that the apex bank had cleared all verified foreign exchange backlog, underscoring the fact that liquidity would improve in the foreign exchange market.

The bank conducted a Treasury Bills auction of N1.64trn on Wednesday, at stop rates of 16.24 per cent,  17 per cent, and 21.124 per cent for the 91-day, 182-day, and 364-day tenors, respectively.

The decision to increase the interest  rate raised lots of concern among citizens and economic experts, but the governor of the apex bank said the decision was intended to stabilise the economy by bringing interest rate at par with the current inflation in the country, stating that the increase would not be long.

“While the increase in interest rate may have tendencies toward strangulating the economy, with the foreign exchange rate coming down, that also helps to moderate it overall.

“And as I said earlier, you would expect that this would not be too long drawn; at least I would hope so. We are getting towards a situation where the exchange rate is moderating, and we are expecting it to moderate and then it finds a level that, quite frankly, is sustainable. This would involve huge collaboration with the fiscal side because a lot of that cannot just rely on the monetary side alone,” the governor said.