The Central Bank of Nigeria (CBN) has said that the Nigerian economy has recorded over $1.5 billion in foreign exchange (FX) inflow in March 2024, indicating that its monetary policy initiatives are working according to plan.
This was revealed by Hakama Ali, the bank’s Acting Director, Corporate Communications Department, in a statement made available on March 29.
She explained that available data before the bank shows the inflows result from a concerted effort by the CBN to stabilize the foreign exchange market.
She said the naira has also continued to gain value in the autonomous foreign exchange market, as it traded at N1,309/$1 on Thursday, against N1,611/$1 in the second week of March 2024.
Hakama further said the naira is headed towards the right direction, and the administration of Yemi Cardoso, CBN governor, remains committed to ensuring the stability of the market and the appropriate pricing of the naira against other major currencies worldwide.
Meanwhile, the monetary policy committee (MPC) of the CBN, on March 26, raised the monetary policy rate (MPR), which benchmarks interest rates, from 22.75 percent to 24.75 percent in a bid to rein inflation.
The committee also retained the cash reserve ratio (CRR) at 45 percent and the liquidity rate at 30 percent.
Speaking on the rationale behind the increase, Cardoso said the major objective of the CBN is to manage inflation, but said the bank is not “unmindful of the impact that the interest rate increases are having”.
Cardoso said with the interest rate increases, the foreign exchange market “becomes a lot more lively” — a situation the CBN governor said is reducing the exchange rate and cost.