Nigeria’s foreign exchange market has witnessed a significant surge in activity, with the Central Bank of Nigeria (CBN) and commercial banks selling a whopping $9.9 billion in August 2024. This impressive turnover, reported by the FMDQ, represents a 33.88% month-on-month increase, equivalent to an additional N2.51 trillion.
The CBN’s efforts to stabilize the naira have yielded temporary gains, with the currency appreciating to N1,596.52/876.26M.
However, the naira’s value has continued to fluctuate, dropping to N1,658/ on Tuesday.
CBN Governor Olayemi Cardoso emphasized the importance of addressing the fundamentals of forex expenses to strengthen the naira. “Until we diversify our economy, achieving a strong exchange rate will remain elusive,” he noted.
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Cardoso highlighted the need for increased non-oil exports and import substitution to calibrate Nigeria’s taste for foreign goods. “We must find ways to produce what we consume and reduce our reliance on imports,” he stressed.
The CBN’s strategy to unlock diversified sources of foreign exchange has yielded positive results, with remittances inflow reaching $585 million in August, a 130% increase from the corresponding period last year.
As Nigeria navigates its economic challenges, the CBN remains committed to ensuring an efficient foreign exchange market. Cardoso warned that the apex bank will penalize “those who play the market” to maintain stability.
With Nigeria’s external reserves reaching $39.07 billion as of September 19, 2024, the CBN is optimistic about the economy’s potential.
However, experts caution that sustained economic growth requires addressing the nation’s structural challenges.
