The Governor of the Central Bank of Nigeria, Dr Olayemi Cardoso, has disclosed that the foreign exchange inflows recorded in the first quarter of 2024 into Nigeria were about 136 per cent of the total inflows recorded in 2023.
Cardoso said this at the Vanguard Economic Discourse themed ‘Reforms in The Era of Global Economic Uncertainties: Whither Nigeria’, which was held in Lagos on Thursday.
The apex bank governor, represented by the Director of Risk, CBN, Blaise Ijebor, said, “We remain committed to using all the orthodox monetary policy tools available to us to address inflation. We have also embarked on major reforms to liberalise the foreign exchange market, which has enhanced transparency, reduced arbitrage opportunities, promoted stability and improved the 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. We are already seeing the result of these reforms in the growth of FX flows into the country. The FX flows into the country in Q1 of 2024 was 136 per cent of the total inflows that we had in the whole of 2023.”
The CBN has been issuing a flurry of circulars on the forex market in a bid to sanitise the system.
The regulator recently licensed 14 new International Money Transfer Operators, as it sought to double remittances into the country.
At the end of the Monetary Policy Committee meeting on Tuesday in Abuja, the CBN governor said, “Our target, of course, is to double remittance flows within the year and as I said, we have started that process to ensure that it happens.”
Speaking further at the Vanguard event, Cardoso said global uncertainties were having a significant impact on economic growth.
“The financial tightening that we have seen globally has been as a result of monetary authorities taking steps to rein inflation. The global market tightening has had an impact on developing economies like ours because we have seen flights of investment leaving the global economy back to safety as they worry about risks and uncertainties.
“The challenge of high inflation in Nigeria is driven largely by food inflation, due to the rising costs of transport of farm produce, infrastructure-related constraints, security challenges on food producing areas, and exchange rate pass-through to domestic prices for imported goods.
“All of these have created uncertainty for businesses and homes. Another concern that we face is the volatility in the foreign exchange market, which over the years has been driven by market distortions and reduced supply of foreign exchange, which had created an opportunity for speculative activities.”
According to the apex bank governor, 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.
“As the governor of the Central Bank of Nigeria, I remain committed to repositioning the bank to deliver meaningful data-driven and sustainable solutions with clear positives for all of Nigeria. Addressing these challenges requires a concerted effort of all stakeholders, especially the monetary and fiscal authorities to work in harmony.
“Like you all know, we are always on the lookout for new ideas for new collaboration or new ways to add value to our economy and to build our work for all of us. My team and I at the Central Bank of Nigeria are determined to continue to make bold reforms to make the economy work for all Nigerians.
“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. Luckily, we are already seeing a deceleration in inflation evidenced by the decline in the month-on-month growth in headline and food inflation.”
On the Bureau de Change segment of the market, Cardoso explained, “We have developed and revised regulatory and supervisory guidelines for BDC operation in Nigeria. This is aimed at ensuring that BDCs play the right role that they have been envisioned to play in the foreign exchange market. In addition, we have also revoked the license of BDCs who we have been who have been established and have been involved in unwholesome practices.”
The CBN governor stated that the regulator would continue to be focused on increasing the flows of diaspora remittances into the economy via official channels to improve liquidity in the FX market.
“We are confident that a good implementation of our reform programme will restore the economy to the path of inclusive and accelerated economic growth in the near term. I won’t lie but much more work is required to address our economic challenges. Let me assure you that the Central Bank of Nigeria is committed to will and will continue to enhance its effort to deliver on its mandate of promoting monetary and price stability in Nigeria,” he assured
