A testament of its monetary policies emphasized by a $1.5bn inflow, is evidence that the Central sbdnk of Nigeria (CBN) has reported a significant economic boost.
Acting Director of Corporate Communications at the CBN, Mrs. Sidi Ali made this announcement through a statement to journalists.
Mrs. Ali also noted that it followed on from the threshold set by the previous week’s Central Bank Monetary Policy Committee meeting in which there were indications of recovery in purchasing mangers indexes and business expectations.
It follows on from last week’s Central Bank Monetary Policy Committee meeting where there were optimistic comments around improving purchasing managers’ indexes, business expectations and government fiscal plans for 2023/24.
Naira exchange rate reached N1,309 to one dollar at Autonomous Foreign Exchange market this Friday as against N1,611 two weeks ago in March 2024 during an interesting labelling.
Ali however expressed optimism over naira’s progress ahead and reiterated CBN under Mr. Olayemi Cardoso’s leadership commitment towards maintaining market stability as well as ensuring a fair valuation for naira relative to global currencies.
The initial fall of naira took place after CBN decided to unify official foreign exchange rates on June 14th, 2023 leading to depreciation of the national currency which exceeded 1600 per greenback rate level. However, during its latest (294th) Monetary Policy Committee meeting held recently two points increased benchmark interest rate to 24.75 percent.
However, the recent Monetary Policy Committee (MPC) meeting, the 294th in its history, saw a decisive move to raise the benchmark interest rate by two percentage points to 24.75 percent.
This follows an earlier adjustment in February when the borrowing rate increased by four points to 22.75 percent. Governor Cardoso, speaking after the MPC meeting, highlighted that all verified foreign exchange backlogs have been cleared implying a positive shift towards improved liquidity in the foreign exchange market.
Furthermore, CBN conducted a huge auction of Treasury Bills offering N1.64 trillion at stop rates of 16.24%, 17% and 21.124% for 91-day, 182-day and 364 day tenors respectively.
The rise in interest rates has caused concern among the public and financial experts alike. However,CBN Governor Cardoso clarified that this step was intended to harmonize interest rates with present inflation rates hence stabilizing economy. He added that the increase would not be long lasting.
In addition, Governor Cardoso expressed his understanding of potential economic stress brought about by increased interest rates but also mentioned reduced effects from reduced foreign exchange rates. He foresees a situation where the exchange rate will stabilize at a reasonable level in the near future, emphasizing on significant cooperation with fiscal authorities as only monetary measures are not adequate for maintaining equilibrium in the country.