By Adedapo Adesanya
The Governor of the Central Bank of Nigeria (CBN), Mr Olayemi Cardoso, on Friday disclosed that the Nigerian foreign exchange (FX) market received a boost of over $1 billion in liquidity within the past few days.
During his presentation, while appearing before the Senate in Abuja, he said this was achieved after the central bank introduced some policies a few days ago to ensure transparency in the market.
According to the CBN governor, there has been an upward shift in the FX market as a result of the recent reforms initiated by the apex bank, assuring the parliament that the new policies were attracting the interest of foreign portfolio investors.
“We have already begun to see shifts in a positive direction, with significant interest from foreign portfolio investors which was a concern that has already begun to supply the much-needed foreign exchange to the economy.
“For example, upward of the last few days. We have had over $1 billion that have come into the market. And this quite frankly is the answer to the question,” he said when he was grilled by the Senate’s Committee on Banking, Insurance, and Other Financial Institutions.
Mr Cardoso said this is a solid sign of confidence in the market, adding that the recent moves, including the unification of the exchange rates, clearing of FX backlog obligations, and new policies for the Bureau de Change (BDCs) and banks were some of the tools the bank has resorted to.
“We have a strong belief that these moves will help strengthen the exchange rate and mitigate the disruptions that a high exchange rate has on inflation because they are related,” he stated.
On inflation, the CBN chief reiterated that the country will see a reduction from 28.92 per cent, which it currently stands, to 21.4 per cent.
He said, “Inflation will drop through our inflation targeting measures and this will be done through improved agricultural productivity and a wider global shift in inflation rates.”
The CBN chief called for continued cooperation with the apex bank and other bodies of government including the lawmakers, saying that with their oversight functions, the country will be able to achieve some of the set targets.
Dipo Olowookere