The Central Bank of Nigeria (CBN) has announced a significant inflow of over $1.5 billion into the Nigerian economy, a development that underscores the effectiveness of its monetary policy strategies.
Mrs Hakama Sidi Ali, the Bank’s Acting Director of Corporate Communications Department, highlighted this achievement on Thursday, March 28, 2024, attributing the success to the CBN’s efforts to stabilize the foreign exchange market.
According to a statement from the apex bank, data presented by Sidi Ali indicates that the inflows are a direct result of the CBN’s initiatives aimed at ensuring liquidity and stability within the foreign exchange market. This influx of funds is a clear indication that the measures put in place by the CBN are beginning to bear fruit, reflecting positively on the Nigerian economy.
The statement read:
“The Central Bank of Nigeria (CBN) says the inflow of over $1.5 billion into the economy over the past few days indicates that its monetary policy efforts are working positively.
The Bank’s Acting Director of Corporate Communications Department, Mrs. Hakama Sidi Ali, made the assertions on Thursday, March 28, 2024. She noted that data available to the Bank indicated that the inflows resulted from the Bank’s concerted effort to stabilise the foreign exchange market.
Naira’s value rises to N1,309/$
In a further testament to the CBN’s successful policies, the Naira has seen appreciable gains in the Autonomous Foreign Exchange market. As of the latest trading sessions, the Naira was valued at N1,309 against the US dollar, a significant improvement from its rate of N1,611/$1 in the second week of March 2024.
This recovery in the Naira’s value is seen as a step in the right direction, according to Mrs. Ali, who also assured that the leadership under Mr. Olayemi Cardoso remains dedicated to maintaining market stability and ensuring the Naira’s competitive pricing against other major global currencies.
The statement noted: “According to her, the Naira has also continued to record gains in the Autonomous Foreign Exchange market as it traded at N1,309/$1 as 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, she 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.
“It will be recalled that the CBN’s Monetary Policy Committee (MPC) announced a two-percent increase in its benchmark rate from 22.75% to 24.75% on Tuesday, March 26, 2024. During his post-meeting briefing, the Governor, Mr. Olayemi Cardoso, also reiterated that the CBN had cleared all verified foreign exchange backlog, underscoring the fact that liquidity would improve in the foreign exchange market.”
Further highlighting the CBN’s proactive monetary interventions, the Bank successfully conducted an auction of Nigerian Treasury Bills (NTBs) worth N1.64 trillion on Wednesday, March 27, 2024.
The auction saw stop rates of 16.24%, 17%, and 21.124% for the 91-day, 182-day, and 364-day tenors, respectively. This move is part of the broader strategy to manage liquidity in the financial system effectively.
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In February, the CBN said overseas remittances into the country rose to $1.3 billion in February 2024 compared to $300 million in the preceding month. The CBN also reported a significant rise in foreign inflows in February 2024, driven by higher remittance payments from Nigerians living abroad and a spike in the purchase of naira assets by foreign portfolio investors.
She noted foreign investors purchased over $1 billion of Nigerian assets last month, with the total portfolio flows for the early part of 2024 reaching at least $2.3 billion, compared to the $3.9 billion recorded for the whole year in 2023.
The surge in foreign exchange inflows has continued into March 2024, attributed to the recent adjustments in benchmark interest rates which have heightened investor interest in short-term sovereign debt.
Based on the previous statement and the current statement, Nigeria has likely recorded a total of $3.8 billion in foreign capital in the first quarter of 2024.
The apex bank further disclosed that over 75% of bids received during the auctions of government securities held on March 1 and 6, 2024, were from foreign investors, showcasing their growing interest in Nigeria’s financial instruments.
