Governor of the Central Bank of Nigeria (CBN) Yemi Cardoso, has disclosed that the foreign exchange market has received a boost of over $1 billion in liquidity in the last few days.
Cardoso made the disclosure in a statement on Friday, during a presentation to the Senate.
He said there has been an increase in the FX market as a result of the recent reforms initiated by the CBN, just as the reforms have generated significant interests from foreign portfolio investors.
“We have already begun to see shifts in a positive direction. Indeed, we have already begun to see positive results with significant interest from foreign portfolio investors which was a concern that already begun to supply the much-needed foreign exchange to the economy.
“For example, in the last few days, we have had over $1 billion that have come into the market. And this quite frankly is the answer to the question,” he stated.
Meanwhile, the CBN also stated that Nigeria lost around $1.4 billion over the restriction of forex to 43 items under the leadership of Godwin Emefiele.
Deputy Governor of the CBN in charge of Economic Policy, Muhammad Sani Abdullahi, while addressing the senate committees on banking and finance on Friday, said the denial of access to forex for the 43 items contributed to the skyrocketing inflation currently witnessed in the country.
He further clarified that the CBN did not ban the importation of those items since it is not a trade regulator and the responsibility for allowing goods into the country rests on the fiscal side of the economy.
“When we resumed at the bank, we realised the bank has been involved in areas which were not central banking. One of them is trade policy. Central banks do not have responsibility for trade policy. It is a fiscal issue.
“What happened was that 43 items were identified and denied foreign exchange. They were never banned from the borders.”
“What it resulted in was that the country collectively lost $1.4 billion between 2015 and 2019 because of the FX ban on these particular items. The second part is that they fuelled inflation as it increased the prices of these products.”
Abdullahi that the reason for the bank’s decision to allow access to these items was to remove the “distortions” in the market and the ban was one of them.
