Naira will stabilise as foreign investments come in, says CBN

The Central Bank of Nigeria (CBN) says its reforms are encouraging investors to return to the country.

In an interview with Arise Television on Monday, Olayemi Cardoso, CBN’s governor, said the foreign investors have taken an interest in understanding the reforms and how the economy has progressed.

According to the governor, as international investors invest in Nigeria, foreign exchange volatility will reduce, resulting in naira’s stability.

The naira has been fluctuating, hitting an all-time low in the official window when it closed at N1,348.63/$ on January 29, 2024.

Similarly, the parallel FX market, on January 31, recorded its highest rate when the local currency traded at N1,530 against the dollar.

On February 5, the naira traded at N1,419.86 to a dollar at the official window and N1,450/$ at the parallel market.

The CBN has been rolling out policies to stabilise the naira, and according to Cardoso, reforms by the apex bank are attracting foreign investors whose investments will make it possible.

“Today, I would say that we have a situation where a lot of foreign portfolio investors are very interested in coming back to the Nigerian market,” Cardoso said.

“If there’s any group that has taken a methodical interest in understanding the reforms that are taking place and see how it is taking the country to a direction they believe is arrival, it is the foreign investors.”

Cardoso said having crude oil sales funds in the central bank boosts the confidence of foreign investors in Nigeria, which leads to a stable economy.

“The recent move to have NNPC and some of the other MDAs move their funding straight to the central bank also sends a very powerful signal and boosts investors’ confidence,” he said.

“It is in the right direction, as the confidence comes back and their money starts coming in, volatility begins to reduce. As the volatility reduces and the foreign exchange market stabilises, the naira, which is currently undervalued, will stabilise.”

The Apex bank governor also assured Nigerians that the time to panic over the economy is not now but of the past.

“The time for panic is not now. The time is past. We are on the road now where the right policy decisions are being taken,” Cardoso said.

Cardoso said CBN’s decisions are validated by the international community and the policies are improving the country’s ratings.