The Central Bank of Nigeria, said overseas remittances into the country rose to $1.3 billion in February compared to $300 million in the preceding month.
The increase is attributed to substantial remittance payments by Nigerians in the overseas and purchases of naira assets by foreign portfolio investors.
Mrs Hakama Sidi Ali, the apex bank’s Acting Director of Corporate Communications, made this known in a statement made available to the media.
She added that foreign investors purchased more than US$1 billion of Nigerian assets last month, with total portfolio flows of at least US$2.3 billion recorded thus far in 2024 compared to US$ 3.9 billion seen in total for last year.
According to her, higher FX inflows continued into March 2024, driven by increased investor interest in short-term sovereign debt following the recent adjustment to benchmark interest rates.
She noted that Government securities issuances had been significantly oversubscribed, with foreign investors accounting for over 75% of bids received at the auctions conducted on March 1 and 6, 2024.
Sidi mentioned that the CBN Governor, Mr. Olayemi Cardoso set out a detailed strategy to curb inflation, stabilise the exchange rate, and spur confidence in the banking system and economy, using last month’s Monetary Policy Committee meeting and a conference call with foreign portfolio investors to set expectations for sustained increases in Nigeria’s foreign currency reserves and improved liquidity in the foreign exchange market.
“All the different measures we have taken to boost reserves and create more liquidity in the markets have started to pay off,” Governor Cardoso said.
“When people understand the real issues and see a strategy and a plan, things tend to calm down. Our objective today is to ensure that the market has supply, that the market functions, and that investors can come in and go out,” he noted.
She said higher FX inflows continued in March driven by increased investor interest in short-term sovereign debt following recent adjustment to benchmark interest rates.
According to the acting CBN director, government securities issuances had been significantly oversubscribed, with foreign investors accounting for over 75 per cent of bids received at the auctions conducted on March 1 and 6, 2024.
In one of its most audacious responses to the ravaging inflation in the country, the CBN MPC had raised the Monetary Policy Rate (MPR), benchmark interest rate by 400 basis points to 22.75 per cent from 18.75 per cent.
The bank also adjusted the asymmetric corridor around the MPR to +100/-700 basis points from +100/-300 basis points.
The central bank further raised banks’ Cash Reserve Requirement to 45 per cent from 32.5 per cent and retained the Liquidity Ratio at 30 per cent.
The MPR is the rate at which commercial banks borrow from the apex bank and often determines the cost of funds in the economy.
The significant policy rate hike seeks to drive down inflation substantially, according to the CBN governor.
Cardoso, who read the committee’s communique, noted that decisions were centered on the current inflationary and exchange rate pressures, projected inflation, and rising inflation expectations.
He said MPC was concerned about the persistent rise in the level of inflation and emphasised the committee’s commitment to reverse the trend as the balance of risk leaned towards rising inflation.
Nonetheless, the CBN governor noted that the members acknowledged the trade-off between the pursuit of output growth and taming inflation but was convinced that an enduring output expansion is possible only in an environment of low and stable inflation.
