The Central Bank of Nigeria has revealed that $1.5bn has flowed into the Nigerian economy over the past few days, indicating that its monetary policy efforts have been effective.
The Acting Director of the Corporate Communications Department of the CBN, Mrs Sidi Ali, disclosed this in a statement made available. Saturday Punch On Friday.
He noted that data available to the bank indicated that these inflows were a result of its concerted efforts to stabilize the foreign exchange market.
According to Ali, the naira continued to post gains in the autonomous foreign exchange market at N1,309/$1 on Friday against N1,611/$1 in the second week of March 2024.
While Thursday's rate indicated that the naira was heading in the right direction, Ali assured that the Cardoso-led CBN would remain committed to ensuring the stability of the market and proper pricing of the naira against other major currencies around the world.
The CBN had on June 14, 2023 pegged the country's currency exchange rate due to which the naira weakened above 1,600/$ in the official market.
Meanwhile, the CBN held its 294th MPC meeting from Monday to Tuesday where it raised the benchmark interest rate by two percentage points to 24.75 percent.
It had earlier revised the lending rate by four per cent to 22.75 per cent in February.
During his post-meeting briefing, the CBN Governor, Mr Olemi Cardoso, reiterated that the apex bank had cleared all verified foreign exchange balances underlining the fact that liquidity in the foreign exchange market would improve.
The bank on Wednesday conducted an auction of N1.64trn of treasury bills at stop rates of 16.24 percent, 17 percent, and 21.124 percent for 91-day, 182-day and 364-day tenors respectively.
The decision to increase the interest rate caused a lot of concern among citizens and economists, but the apex bank governor said the decision was taken to stabilize the economy by bringing the interest rate in line with the country's current inflation. The increase will not last long.
“An increase in interest rate may have strangulating tendencies in the economy, depressing the foreign exchange rate, which helps to moderate it overall.
“And as I said before, you would expect it would not be long drawn; At least I hope so. We're moving towards a situation where the exchange rate is moderate, and we expect it to moderate, and then we see a situation where it's quite frankly, stable. It will involve a great deal of collaboration with the financial side because most of it cannot be relied upon only on the monetary side,” the governor said.