CBN’s Effective Monetary Policy Results in $1.5bn Inflows, Naira Gains

The Central Bank of Nigeria has announced a significant boost to the Nigerian economy, with over $1.5 billion flowing in recently. This influx of funds is a clear indication that the bank’s monetary policies are proving effective in stabilizing the economy.

In a statement released by the CBN’s Acting Director of Corporate Communications Department, Mrs. Sidi Ali, it was revealed that the influx of funds was a result of the bank’s efforts to stabilize the foreign exchange market. As a result, the naira has seen gains in the Autonomous Foreign Exchange market, trading at N1,309/$1 on Friday, a significant improvement from N1,611/$1 in March 2024.

The CBN’s commitment to market stability was further emphasized by Ali, who assured that the bank, under the leadership of Governor Olayemi Cardoso, would continue to ensure the appropriate pricing of the naira against other major currencies worldwide.

The recent Monetary Policy Committee (MPC) meeting saw the CBN raise the benchmark interest rate by two percent to 24.75 percent. This decision, while raising concerns among citizens and economic experts, was explained by Governor Cardoso as a necessary step to align interest rates with current inflation rates in the country. The governor also emphasized that the increase in interest rates would not be prolonged, as the goal is to stabilize the economy and achieve a sustainable exchange rate.

In addition to the interest rate adjustment, the CBN conducted a Treasury Bills auction of N1.64 trillion, further demonstrating its commitment to maintaining liquidity in the foreign exchange market. The stop rates for the auction were set at 16.24 percent, 17 percent, and 21.124 percent for the 91-day, 182-day, and 364-day tenors, respectively.

Overall, the CBN’s recent actions signal a proactive approach to economic stability and growth, with a focus on ensuring a sustainable exchange rate and market stability. The collaboration between the monetary and fiscal sides will be crucial in achieving these goals and driving the Nigerian economy forward.