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CBN declares forex market stable as reserves hit $52.5bn
['Boluwatife Oshadiya', 'Boluwatife Oshadiya Is A Nigerian Journalist', 'Communications Professional At Bizwatch Nigeria', 'Where He Contributes To Editorial Leadership', 'Business Reporting. His Coverage Focuses On Capital Markets', 'Banking', 'Finance', 'The Broader Business', 'Economic Landscape', 'Delivering Data-Driven Analysis']
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Cardoso said the improvement reflects sustained foreign exchange inflows and renewed investor confidence in Nigeria’s economy following a series of monetary policy and market reforms implemented over the past 34 months.
According to the CBN governor, the reforms have also strengthened the naira, with the spread between the official foreign exchange market and Bureau de Change (BDC) rates falling below two per cent, a development he attributed to improved market transparency and exchange rate reforms.
What’s NextThe CBN is expected to continue implementing its monetary and foreign exchange reforms as it seeks to sustain exchange rate stability and further moderate inflation.
Bottom LineThe Bottom Line: The CBN is increasingly pointing to stronger reserves, a narrower official-parallel market exchange rate gap and easing inflation as evidence that its reform agenda is gaining traction.
The sustainability of these gains, however, will depend on continued foreign capital inflows, fiscal discipline and the bank’s ability to maintain confidence in the foreign exchange market.