The Central Bank of Nigeria, CBN, has vowed to deal with abuses and infractions in the foreign exchange, (Forex) market.
CBN insisted that the Naira is currently undervalued. It noted that it was implementing measures to improve liquidity in the forex market in the short, medium and long term.
The CBN Governor, Olayemi Cardoso, made this vow over forex in a keynote address at the Nigeria Economic Summit Group 2024 Economic Outlook report presentation.
Cardoso disclosed that measures to improve forex liquidity include ongoing collaboration with the Ministry of Finance and NNPC to ensure all forex inflow is returned to the CBN.
He said: “Our initiatives on FX, I’m pleased to note our collaboration with the Ministry of Finance and NNPC to ensure that all FX inflow are returned to the CBN.
This coordinated effort will greatly enhance the Bank’s forex flow and contribute to accretion of reserves.
“The expected stability of the FX market in 2024 can be attributed to the expected reduction in petroleum products import and the recent implementation of the market-determined exchange rate policy by the CBN.
“This reform is designed to streamline and unify forex rates fostering transparency and reducing arbitrage opportunities.
Investor confidence
“The resulting consistent and stable exchange rate will boost investor confidence. It will also be attracting foreign investment, elevating Nigeria’s appeal to global investors.
“Our focus is on addressing fundamental issues that have hindered the effective operations of our market over the years.
“Upholding the integrity of financial markets is crucial for building confidence.
“With the completion of an independent forensic review, we are addressing the backlog of valid forex transactions and we remain steadfast in our commitment to decisively address any infraction and abuses.
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“In our efforts to stabilise the exchange rate, it is important that we prioritise transparency and create a market environment that enables a fair determination of exchange rates, ensure stability for businesses and individuals alike.
“We believe that the Naira is currently undervalued and coupled with coordinated measures with the fiscal side, we will expedite genuine price discovery in the near term.
“This coordinated approach will contribute to a balanced and stable forex rate,” the CBN boss added.
