Naira gradually finding its feet, Cardoso declares

• Says Nigeria recorded $24b inflow Q1 2024
• CBN quickens settlement of Diaspora remittances

The naira is gradually finding its value, as the worst days are over, Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has said.

Speaking with Bloomberg TV in London, Cardoso said the present value of the naira hovering between N1,460 and N1,500 should be put in context. He added that the country recorded a foreign exchange inflow of about $24 billion in the first quarter of 2024.

“When I came into office in September 2023, naira was headed in the direction that everybody did not like. There was a lot of fear and panic. There was a loss of confidence and trust. We felt it was important to address those issues of confidence and trust.

“Looking at where the naira is today without considering the issues involved will not allow you make the right conclusion. There were backlogs of FX that needed to be settled and there was an incredible amount of uncertainty,” he stated.

He noted that when he came into office, many Nigerians were converting their money into dollars as uncertainties pervaded the market, which needed to be reversed. He argued that liquidity is coming back into the system, as buyers and sellers freely interact, leading to a stable market.

Cardoso added: “There has been a lot of stability in the last three weeks that gives us an idea of where we need to be. We have one rate now. We are alive to the way and manner the market operates.”

However, the CBN chief stressed the need for a sequence of the government’s reform agenda, saying it has to be so to achieve the right outcomes.

In the meantime, fresh steps that will hasten the settlement of Diaspora remittances have been taken by CBN, he said. In a circular, ‘TED/FEM/PUB/FPC/001/019 addressed to all deposit money banks and the International Money Transfer Operators (IMTOs), the apex bank said the measures were aimed at widening access to local currency liquidity for the timely settlement of Diaspora remittances.

The circular, signed by the Acting Director, Trade and Exchange Department of the CBN, Dr W.J Kanya, reads: “As part of CBN’s commitment to the smooth functioning of the foreign exchange market and enabling greater remittance flows through formal channels, the bank has implemented measures that will enable eligible IMTOs access naira liquidity through the CBN.”

The CBN boss said, henceforth, eligible IMTO operators could access the CBN window directly or through their Authorised Dealer Banks (ADBs) to execute transactions for the sale of foreign exchange in the market.

Cardoso noted that the rise in FX liquidity in Q1 2024 was the highest in any quarter since 2021.

“In terms of liquidity, especially on the foreign exchange side, we’ve seen an increase. The first quarter of this year has resulted in a total inflow of about $24 billion. This is almost 40 to 50 per cent more than the quarters up to about 2021.

“The tools are having a positive impact. So, we believe that continuing on this trajectory, liquidity will continue to grow,” he said.