201. Naira Gains as Nigeria Clears All $7 Billion Forex Backlog.
- Author
-
Onu, Emele
- Subjects
REMITTANCES ,ELECTRONIC funds transfers ,FOREIGN exchange ,FOREIGN exchange market - Abstract
Nigeria's naira has experienced significant gains in both official and parallel markets after the Central Bank of Nigeria announced that it has cleared a backlog of unmet foreign-exchange obligations totaling $7 billion. This move is seen as a fulfillment of Governor Olayemi Cardoso's commitment to stabilize the market and restore investor confidence. The clearing of the backlog is expected to boost market confidence, strengthen the naira in the medium term, and contribute to a downward trajectory on inflation. Nigeria has faced foreign-exchange scarcity due to low crude production and a lack of economic diversification, leading to unmet obligations and a decline in investor interest. The government has implemented various measures to attract investors, including allowing the naira to trade more freely and introducing additional measures to address the backlog. These efforts have resulted in increased overseas remittances and foreign-investor portfolio asset purchases. The central bank is expected to announce further rate hikes to rein in the naira and inflation. [Extracted from the article]
- Published
- 2024