By Chinwendu Obienyi
Central Bank of Nigeria (CBN) Governor, Mr Yemi Cardoso, on Tuesday revealed a rise in foreign exchange (FX) inflows from $37.93 billion to $38.8 billion over the first five months of 2024. The increase reflects the gradual recovery of the Nigerian economy, attributed to recent reforms and measures undertaken by both the Federal Government and the Central Bank.
Cardoso made the disclosure at the conclusion of the 296th meeting of the Monetary Policy Committee (MPC) held in Abuja. He acknowledged the persistent challenges of food inflation and FX management but commended the fiscal authorities for their efforts to implement policies aimed at moderating food prices. He expressed optimism that these measures would alleviate some of the economic pressures.
Despite ongoing challenges with FX, Cardoso highlighted the positive impact of recent policy tools. He noted that the exchange rate has stabilized, reducing opportunities for arbitrage, which is a significant development.
Foreign exchange inflows increased notably from $37.93 billion between January and May 2024 to $38.8 billion. More encouragingly, net inflows surged by 73.4% in May 2024 compared to the same month in the previous year.
Remittances from the diaspora reached $2.34 billion by the end of June 2024, up from $1.58 billion during the same period last year. Additionally, capital importation for the first half of 2024 totaled $5.92 billion, a significant increase from $1.77 billion in the corresponding period of 2023. These figures indicate a positive trend in foreign exchange management.
Cardoso also observed improvements in the capital markets and the banking sector, attributing this to proactive guidance provided to banks as they prepare for the future of a $1 trillion economy. He acknowledged that inflation remains a challenge but noted signs of moderation.
Building trust and credibility remains crucial, according to Cardoso. He emphasised that without restoring confidence, policy measures would be ineffective. He expressed satisfaction with the progress made in rebuilding trust and highlighted that experts and observers recognize the Central Bank’s and the Nigerian economy’s positive trajectory.
Cardoso underscored the importance of continued collaboration between fiscal and monetary authorities. He assured that the Central Bank will maintain vigilance and commitment to its responsibilities. “Strengthening our collaboration and enhancing our joint efforts will undoubtedly lead us to a more favorable position. This will establish a solid foundation for growth, allowing the organized private sector’s ambitions to be realized and contributing to the broader economic development of our country,” Cardoso concluded.