In a remarkable turnaround, Nigeria’s foreign exchange inflows in the first quarter of 2024 have surged to a staggering 136% of the total inflows recorded throughout the entire year of 2023.
This was revealed by Dr. Olayemi Cardoso, the Governor of the Central Bank of Nigeria (CBN), during the Vanguard Economic Discourse held in Lagos on Thursday.
Cardoso, who was represented by the Director of Risk at the CBN, Blaise Ijebor, attributed this significant increase in FX flows to the bank’s commitment to major reforms aimed at liberalizing the foreign exchange market. These reforms have enhanced transparency, reduced arbitrage opportunities, promoted stability, and improved liquidity in the market.
“The settlement of all valid FX forwards, which was one of my commitments when I came on as governor of the Central Bank of Nigeria, has also improved the confidence of stakeholders,” Cardoso stated. “We are already seeing the result of these reforms in the growth of FX flows into the country.”
The CBN governor also highlighted the bank’s efforts to address the challenge of high inflation, which has largely been driven by food inflation due to rising transport costs, infrastructure-related constraints, security issues in food-producing areas, and exchange rate pass-through to domestic prices for imported goods.
“The monetary authority had to increase the capacity of the banking system to be able to facilitate the size of transactions that would help build and establish the $1tn economy that President Bola Tinubu envisioned,” Cardoso said.
To further boost foreign exchange inflows, the CBN has licensed 14 new International Money Transfer Operators and is committed to doubling remittance flows within the year. Cardoso also noted that the bank has revoked the licenses of Bureau de Change operators involved in unwholesome practices.
“We have embarked on tightening the bank’s monetary policy to address inflationary pressure on the economy. I believe that the results will become evident in the near term,” Cardoso assured, adding that the central bank is committed to enhancing its efforts to deliver on its mandate of promoting monetary and price stability in Nigeria
