Central Bank of Nigeria blames Forex volatility on uncontrolled dollar demand

The Central Bank of Nigeria (CBN) has attributed the recent volatility in the country’s foreign exchange market to seasonal demand for dollars.

This was stated at the 295th Monetary Policy Committee (MPC) meeting in Abuja on Tuesday.

According to the CBN, the volatility is a result of the interplay between demand and supply in a freely functioning market system.

The bank also noted that while year-on-year headline inflation rose moderately in April 2024, month-on-month measures of headline, food, and core inflation declined significantly.

The CBN commended the recent approval of licenses for 14 international money transfer operators, which is expected to improve competition and lower transaction costs, attracting more remittances through formal channels.

The bank also stated that mobile money operators, including fintech firms like OPay, Palmpay, Kuda Bank, and Moniepoint, will resume enrolling new customers in a few months.

The CBN emphasized that it is not against the operation of fintechs and has not revoked the license of any fintech organization.

However, the bank believes there is a need to strengthen regulation in the sector to check against leakages.

Overall, the CBN is working to sustain its focus on accretion to reserves and ensure the continued stability of the banking system.

For Diaspora Digital Media Updates click on Whatsapp, or Telegram. For eyewitness accounts/ reports/ articles, write to: citizenreports@diasporadigitalmedia.com. Follow us on X (Fomerly Twitter) or Facebook