We have already begun to see shifts in the positive direction. Indeed they (CBN measures) have already started yielding early results.
Yemi Cardoso, the governor of the Central Bank of Nigeria (CBN), has stated that the actions taken by the apex bank to stabilise foreign exchange rates have begun to show promising outcomes.
He pointed out that since high exchange rates and inflation are strongly associated, the steps would assist in stabilizing foreign currency rates and reduce the distortion that high exchange has on inflation.
During a briefing to the Joint Senate Committee on Finance, Banking, Insurance, and Financial Institutions on Friday, February 9, Cardoso asserted that the Nigerian market has seen an influx of $1 billion in recent days due to operations conducted by the CBN.
He said: “We have already begun to see shifts in the positive direction. Indeed they (CBN measures) have already started yielding early results with significant interest from foreign portfolio investors which was a concern. That has already begun to supply the much-needed foreign exchange to the economy.
“For example, upward of the past few days, we have had over $1 billion that has come into the market, and this quite frankly has answered the question of if our policies are working.”
He added that boosting the flow of US dollars into the Nigerian economy has a big chance of reducing exchange rate volatility, which will in turn slow down inflation.
He insisted that the demand for US dollars for personal and corporate purposes is the real factor influencing the currency rate, notwithstanding the CBN’s tireless efforts to rebuild the central bank’s reputation.