The Central Bank of Nigeria (CBN) has successfully implemented most of its long-awaited monetary policy reforms, providing a window of opportunity for the government to secure sustainable dollar inflows. The Nigerian naira has strengthened, reaching a three-month high of 1,251 per US dollar last Friday, marking a significant improvement from its previous depreciation trend.
This resurgence in the naira’s value has brought relief to households and businesses grappling with a cost-of-living crisis, thanks to increased dollar inflows from foreign portfolio investors attracted by the CBN’s reforms. However, sustaining this positive momentum requires addressing challenges in the upstream oil sector, including issues such as oil theft, leakages, and subsidy practices.
To ensure the stability of forex liquidity and maintain the gains achieved with the naira, the CBN needs the support of the federal government in guaranteeing dollar inflows from the state-owned oil company, NNPC Ltd. It is crucial to address these issues to prevent any potential setbacks to the currency’s stability and the overall success of monetary policy reforms.
Source: Business Day