CBN Governor Yemi Cardoso Announces Impressive 136% Increase in Q1 FX Inflows Compared to 2023

The Governor of the Central Bank of Nigeria (CBN), Dr. Olayemi Cardoso, announced a remarkable surge in foreign exchange inflows during the first quarter of 2024, recording 136% of the total inflows seen in the entirety of 2023. 

Speaking at the Vanguard Economic Discourse in Lagos on Thursday, Cardoso, represented by Blaise Ijebor, Director of Risk at the CBN, attributed this success to recent economic reforms.

He said,

“We remain committed to using all orthodox monetary policy tools available to us to address inflation. We have also embarked on major reforms to liberalise the foreign exchange market, enhancing transparency, reducing arbitrage opportunities, promoting stability, and improving market liquidity.”

One of Cardoso’s key achievements has been the settlement of all valid FX forwards, a move aimed at bolstering stakeholder confidence. “The FX flows into the country in Q1 of 2024 was 136% of the total inflows that we had in the whole of 2023,” he noted, underscoring the positive impact of these reforms.

In efforts to sanitise the forex system, the CBN has been issuing a series of circulars and has recently licensed 14 new International Money Transfer Operators, aiming to double remittances into the country. “Our target is to double remittance flows within the year, and we have started that process,” Cardoso affirmed at the end of the Monetary Policy Committee meeting in Abuja.

Addressing the broader economic challenges, Cardoso highlighted the significant impact of global uncertainties on Nigeria’s economic growth. “The financial tightening globally has resulted from steps taken by monetary authorities to rein in inflation. This has caused a flight of investment to safer markets, impacting developing economies like ours.”

Nigeria’s inflation issues, largely driven by food inflation, are exacerbated by rising transport costs, infrastructure-related constraints, security challenges in food-producing areas, and exchange rate pass-through to domestic prices for imported goods. “These factors have created uncertainty for businesses and households,” Cardoso explained.

To address these challenges, the CBN has increased the capacity of the banking system to facilitate the transactions necessary to build and establish the $1tn economy envisioned by President Bola Tinubu. “As the governor of the Central Bank of Nigeria, I remain committed to repositioning the bank to deliver meaningful, data-driven, and sustainable solutions with clear positives for all Nigerians,” he pledged.

The CBN has also taken steps to regulate the Bureau de Change (BDC) segment of the market, developing revised regulatory and supervisory guidelines to ensure BDCs play their intended role in the foreign exchange market. Additionally, licenses of BDCs involved in unwholesome practices have been revoked.

Looking ahead, Cardoso expressed confidence in the ongoing reform programme’s ability to restore the economy to a path of inclusive and accelerated growth. “Much work remains to be done to address our economic challenges, but the Central Bank of Nigeria is committed to promoting monetary and price stability in Nigeria,” he assured.

As part of its efforts, the CBN will continue to focus on increasing diaspora remittances via official channels to improve liquidity in the FX market, aiming to sustain and build on the economic progress achieved so far.