Economy Influxed Over $1.5 Billion In The Last 4 Days — CBN

The economy has received about $1.5 billion in recent days, according to the CBN

According to the Central Bank of Nigeria (CBN), the economy has injected more over $1.5 billion in the last few days.

The apex bank claims that this shows the effectiveness of its monetary policy initiatives.

The assertions were made in a statement on Friday, March 29, by Sidi Ali, acting director of CBN's corporate communications department.

She pointed out that the bank's efforts to stabilize the foreign exchange market were the cause of the inflow, according to data that the bank had access to.

The Autonomous Foreign Exchange market has seen the naira continue to rise, according to Ali; this week, it traded at N1,309 to the dollar, compared to N1,611 in the second week of March 2024.

As the current value of the naira indicates a significant appreciation, the naira-to-dollar exchange rate closed at N1,534 to a dollar on the official NAFEM market on Monday, February 12.

The CBN agreed to raise the interest rate by 200 basis points, to 24.75 percent from 22.75 percent, at its 294th Monetary Policy Committee meeting that was just held.

The governor of the CBN, Olayemi Cardoso, emphasized that the liquidity in the foreign currency market would increase and maintained that the central bank has cleared all verified backlogs of foreign exchange.

The bank held the N1.64 trillion Nigerian Treasury Bill auction on Wednesday, with stop rates for the 91-day, 182-day, and 364-day tenors at 16.24%, 17%, and 21.124 percent, respectively.

The bank's decision to raise interest rates caused great concern among the public and economists alike, but Cardoso assured them that the increase would only be temporary and that the goal was to stabilize the economy by bringing the interest rate up to par with the nation's current inflation rate.

“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,” Cardoso said.

Ali assured that the Cardoso-led CBN will continue to be dedicated to maintaining market stability and the proper pricing of the Naira versus other major currencies globally, even as he noted that Thursday's rate indicated that the Naira was moving in the right path.