Finance and Business Transformation expert, Prof Adegbemi Onakoya, has highlighted the positive impact of the Central Bank of Nigeria’s recent circular on foreign currency reporting requirements. Speaking at the Nairametrics Economic Outlook webinar, Onakoya emphasized that the policies aimed at strengthening the Naira have led to four consecutive weeks of gains against the US dollar, with the Naira closing at N1,251.05 per dollar last Friday.
The circular, titled “Harmonisation of Reporting Requirements on Foreign Currency Exposures of Banks,” issued on January 31, 2024, mandated banks to maintain adequate stocks of high-quality liquid foreign assets to enhance transparency in the foreign currency market. This directive has resulted in increased activity in the Nigerian Autonomous Foreign Exchange Market (NAFEM), with a significant rise in daily turnover to approximately $854 million per week, marking a fourfold increase.
Onakoya commended the CBN’s efforts in promoting transparency and accountability in the foreign exchange market, stating that the harmonization of reporting requirements has provided clarity on foreign currency exposures and encouraged banks to hold sufficient foreign assets. This move has not only boosted confidence in the Naira but has also stimulated growth in the foreign exchange market, leading to increased trading volumes and liquidity.
Overall, the recent measures implemented by the CBN have been instrumental in stabilizing the Naira and fostering a more transparent and efficient foreign exchange market in Nigeria. With continued adherence to these policies, the country is poised for sustained economic growth and stability in the forex market.
