Nigeria’s total FX inflow reached $24bn in Q1 2024, says Cardoso

The Governor, Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso has disclosed that Nigeria’s total foreign exchange (FX) inflow reached $24 billion in the first quarter of the year (Q1) 2024, stressing on the significant improvement in market conditions.

In a 20-minute interview with Bloomberg, Cardoso declared an end to the recent panic over the naira’s devaluation, attributing the stabilisation to restored liquidity in the market.

Cardoso emphasised that Nigeria’s financial challenges were temporary and expressed confidence in the recent policy efforts by fiscal authorities to boost revenues and the tax-to-Gross Domestic Product (GDP) ratio.

Reflecting on his tenure of approximately 10 months, Cardoso noted substantial distortions in the FX market upon his arrival, which he and his team have been addressing gradually.

He remarked, “We feel that a number of things have happened, one of which is the fact that more confidence has come back into the market.”

Cardoso pointed out that the market has seen a significant return of inflows due to improved liquidity, leading to increased confidence among market players on both the buy and sell sides.

“A lot of inflows have come back because there was very little liquidity at the time. And potential players within the market, both on the buy and the sell side, are more confident in the future.

“And when I talk about even the buy side, bear in mind the fact that in the past, what used to happen was people were panicking and front-loading their requests,” he explained.

Cardoso further elaborated that the panic has subsided as liquidity returned into the market, resulting in greater stability in the market.

“In the past two or three weeks, after a period of volatility, we’ve seen a lot of stability within the market. There’s hardly been any movement in the currency. The rates have merged in the past few,” he stated.

The governor noted that the convergence of the two different FX rates into one allows companies to plan more effectively.

However, he acknowledged that the work is ongoing. “We don’t believe that we’ve gotten to the position we want to stay at.

“This is continuous work in progress. And we will do everything possible to ensure that we continue to manage the fundamentals that affect the market in such a way that it will continue to improve,” he concluded.