FX transaction hits $800m – Cardoso
Nigerian central bank Governor Olayemi Cardoso said that dollar liquidity in the country’s currency market has risen sharply, pointing to “positive outcomes” from recent reforms.
“As of yesterday, the volume of transactions in our market was over $800 million. This is the first time in many years it has achieved this level,” he told Nigerian lawmakers Tuesday in Abuja.
The naira has fallen 37 per cent against the dollar since Jan. 26, following steps by the central bank that moved it close to its value on the street — part of an ongoing strategy to unify Nigeria’s official and unofficial foreign-exchange markets and boost investment.
The scarcity of dollars in the domestic market has been a key source of the currency’s weakness, which the central bank has tried to arrest by encouraging Nigerians living abroad to repatriate their money through official channels.
“I want to emphasize that we are now at a turning point,” he said. “I’m confident that positive outcomes are already emerging and will become more apparent in the near future.”
Nigerian President Bola Tinubu eased currency controls and scrapped fuel subsidies after he took office in May to spur economic growth. International investors welcomed the measures, but the moves caused pain at home by raising the inflation rate to near a three-decade high of 28.9% in December.
Cardoso said he expected price pressures to decline over 2024 in response to the central bank’s shift to directly targeting lower inflation as it seeks to restore orthodox monetary-policy practices.
Finance Minister Wale Edun, addressing lawmakers a few minutes later, said that Nigeria had been “on the road to economic disaster” prior to the reforms but was now in a much better place.
