Cbn Reforms: Banking Sector Leads As Fdi Surge Raises Investors' Confidence

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Hny The inflows represent significant gains from diverse reforms instituted by the Central Bank of Nigeria CBN to make the country attractive destination for local and foreign investors. For many stakeholders, the 3.1 billion inflow to the banking sector, representing 55.44 per cent of the total capital inflows, shows how financial sector stability is buoying investors to the domestic economy. There is rising interest from domestic and global investors in Nigeria assets, as seen in the latest capital inflows to the country. The rising investors interest is linked to fallout of crucial reforms instituted by the Central Bank of Nigeria CBN under the Olayemi Cardoso leadership. Upon assuming office in October 2023, the apex bank leadership had prioritised reforms to rebuild Nigerias economic buffers and strengthen resilience. CBNs policies, including the currency reforms, led to investment inflows from abroad, and reduced interventions in the domestic forex market. The unification of exchange rates and the clearing of over 7 billion FX backlog raised the countrys investment outlook, with multilateral organizations, like the World Bank describing it as bold intervention to improve the economys sustainability in the long run. Also, Nigerias sovereign risk spread has fallen to the lowest level since January 2020, erasing the premium accumulated during the pandemic and subsequent strain on its economy. All these are deliberate efforts to woo investors and sustain capital inflows to the economy.

Impact on FX inflows

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