CBN Reports Surge in Foreign Exchange Inflows
By Patience Ikpeme
The Central Bank of Nigeria (CBN) has announced a notable increase in foreign exchange inflows into the country this year, driven by two key factors: a rise in remittances from Nigerians living abroad and increased investment from foreign investors.
According to Mrs. Hakama Sidi-Ali, the Acting Director of Corporate Communications of the CBN, remittances surged to $1.3 billion in February 2024, marking a significant jump from just $300 million the previous month. This increase underscores the growing financial support from Nigerians in the diaspora.
Furthermore, foreign investors have shown renewed interest in Nigerian assets, with investments totaling over $1 billion in February alone. This brings the total foreign investment for the year to $2.3 billion, nearly 60 percent of the total amount invested in 2023.
The positive trend is expected to continue in March, with even higher foreign exchange inflows anticipated. This can be attributed to heightened interest in short-term Nigerian government debt, following recent adjustments to interest rates. Auctions for these government securities held between 1-6 March, 2024, were oversubscribed, with over 75 percent of bids originating from foreign investors. Such robust foreign participation bodes well for the stability of the Naira.
These developments follow a series of measures implemented by CBN Governor, Mr. Olayemi Cardoso, aimed at controlling inflation, stabilizing the exchange rate, and boosting confidence in the banking system and the economy at large.
Expressing optimism about the future, Mr. Cardoso stated, “The steps we’ve taken to increase reserves and improve liquidity are working.” He emphasized the importance of clear communication and a well-defined plan to restore calm and encourage investment.
The efforts of the CBN appear to be yielding positive results. With increased foreign currency inflows, the Naira is expected to strengthen, and the economy stands to benefit from heightened investment activity.
