The Central Bank of Nigeria (CBN) has emphasized that the implementation of an electronic FX matching system and efforts to boost diaspora remittances are pivotal to stabilizing the Naira and restoring its true market value.
CBN Governor Olayemi Cardoso made this assertion during the 59th Annual Bankers Dinner hosted by the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos on Friday.
Cardoso explained that the FX matching system, successfully utilized in other markets, would address distortions in Nigeria’s foreign exchange market and enhance price transparency.
“To further improve the functionality of the FX market, we are introducing an electronic FX matching system. This innovation will refine the price discovery process and strengthen the Central Bank’s oversight capabilities, ensuring stability and transparency,” he said.
He attributed recent FX volatility to panic buying and disinformation about a supposed demand-supply gap. Cardoso clarified that the current USD exchange rate reflected the actions of the most desperate buyers rather than the Naira’s true value.
Boosting Diaspora Remittances
The governor highlighted significant progress in increasing diaspora remittances, with monthly inflows doubling from $300 million in 2023 to $600 million in August 2024.
“We are committed to integrating the Nigerian diaspora into our financial system. Initiatives like the non-resident BVN registration aim to facilitate this integration while empowering diaspora members to save, invest, and support their families,” he added.
Addressing Historical Challenges
Cardoso shed light on inherited challenges from the FX subsidy regime, which resulted in a revenue loss of approximately ₦6.2 trillion in 2022, surpassing the ₦4.5 trillion lost to fuel subsidies in the same period.
“These funds could have been channeled into critical investments in education, healthcare, and infrastructure,” he noted.
Ongoing Reforms
The CBN governor also reiterated the bank’s commitment to reforms, such as unifying the exchange rate and eliminating distortions. These efforts, he stated, are already delivering positive outcomes for the economy.
The initiatives are part of the CBN’s broader strategy to stabilize the Naira, boost investor confidence, and foster sustainable economic growth.
