Tinubu, CBN Commended for Naira Stabilization

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The Independent Media and Policy Initiative (IMPI) praised the efforts of President Bola Tinubu and the Governor of the Central Bank of Nigeria (CBN), Yemi Cardoso, for implementing policies that have successfully addressed the supply and demand sides of the foreign exchange market, stabilizing the Nigerian economy.

Chairman of IMPI, Niyi Akinsijiu, expressed his appreciation for the dexterity and effectiveness of CBN Governor Olayemi Cardoso in devising and implementing policies that have reshaped the monetary policy and exchange rate ecosystem. These policies have effectively tackled both the supply and demand aspects of the domestic foreign exchange market, leading to a more stable economic environment.

IMPI highlighted one of the significant policies introduced on January 31st, which was aimed at exerting control over the market. The CBN instructed Nigeria’s Deposit Money Banks (DMBs) to bring their Net Open Position (NOP) to the prudential limit by January 1st, 2024. The NOP mandate meant that no bank could hold a long position exceeding 20 percent, thus preventing them from holding more foreign currency assets than liabilities.

Tinubu, CBN Commended for Naira Stabilization

The strategic objective behind this mandate was to encourage banks to offload approximately $7 billion worth of long currency positions into the open market, thereby addressing concerns related to the supply of foreign exchange.

Furthermore, on the same day, the CBN also issued new rules for International Money Transfer Organizations (IMTOs) regarding remittances in Nigeria. These rules encompassed a range of auxiliary policies and focused on person-to-person (P2P) payments of relatively low value from individuals abroad to individuals in their home country. Such remittances constitute a substantial portion of Nigeria’s foreign exchange inflow.

The IMPI recognized the combined impact of these policies in stabilizing the Nigerian economy and commended both President Bola Tinubu and CBN Governor Yemi Cardoso for their proactive approach to addressing the challenges in the foreign exchange market. The group emphasized the importance of these measures in setting the economy on a path of resilience, which will have a positive impact on the overall development and growth of the country.