Nigeria recorded a total foreign exchange inflow of approximately $24 billion in the first quarter of 2024, according to the Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso. He made this disclosure during an interview with Bloomberg TV in London on Tuesday.

Cardoso stated that this inflow is about 50 percent higher than the inflows recorded in previous quarters up to 2021. He also emphasized that the days of excessive naira volatility are over, thanks to the effective monetary policy tools employed by the CBN to address the challenges facing the forex market.

The governor highlighted that inflationary pressure has begun to ease as a result of the bank’s policy measures aimed at reducing the current inflation rate of 33.69 percent. He noted a deceleration in month-on-month inflation rates, describing it as a positive development. Cardoso assured that the Monetary Policy Committee (MPC) members are vigilant in monitoring inflation trends and are committed to ensuring a moderation in inflation numbers.

“The MPC has been very clear in stating that they see inflation as a major impediment to the future of Nigeria and will do everything possible to keep it in check and bring it down as reasonably as they can. So far, there is a deceleration in inflation rates, which is good news. My intuition is that with the measures taken recently and the confidence of the MPC members in closely watching the interest rate trajectory, we should see a continued moderation in the inflation rate,” Cardoso said.

Cardoso did not speculate on whether this could signal the end of the tightening cycle that began in May 2022, noting that data will guide the MPC’s decisions in mid-July. “The MPC is an independent-minded group of people who rely on data. Depending on what data they see at a particular point in time, they will determine whether further hikes are necessary,” he added.

Regarding the stability in the exchange market, Cardoso expressed satisfaction with the progress made in stabilizing the naira. He attributed the relative stability to the CBN’s multi-pronged approach, which addressed issues such as speculation and manipulation in the FX forward contract market.

“We believe we have seen the worst in terms of volatility. When I assumed office in September 2023, the naira was headed in a direction that caused fear, panic, and loss of confidence. It was crucial to address those issues, and we are pleased with the progress so far. In the past few weeks, we have seen significant stability in the market,” Cardoso said.

He explained that various measures were implemented to restore confidence in the foreign exchange system, leading to increased liquidity. “The first quarter of this year saw a total inflow of about $24 billion, which is almost 40 to 50 percent more than the quarters up to 2021,” Cardoso noted.

Cardoso also mentioned the establishment of a committee to facilitate more inflows of diaspora funds into the official FX market. This committee, which reports directly to him, aims to double the inflow of foreign exchange from international monetary operations. He indicated that the committee’s efforts have started to yield positive results, with an increase in inflows from Nigerians in the diaspora.

“We recognize the significant role that Nigerian diasporans play in remitting substantial amounts of money into the system. Capital inflows are crucial because the pass-through from the foreign exchange rate into inflation is significant in Nigeria. This committee’s efforts are already bringing about positive outcomes, and we are confident that these measures will continue to increase liquidity in our market,” Cardoso concluded.