CBN FX reforms necessary for foreign investments — Fitch

Fitch Ratings has stated that the ongoing foreign exchange reforms are necessary to boost foreign direct investment and foreign portfolio investment . Director of Sovereigns at Fitch, Gaimin Nonyane, at a presentation on Monday, stated that Nigeria’s current account will be strengthened by increasing oil refining capacity, but the reforms are still…

Fitch also highlights the substantial fiscal and monetary reforms Nigeria has undertaken over the past year to stabilise the macroeconomic environment and enhance policy coherence and credibility. Fitch projects that these efforts will lead to a decline in the interest-to-revenue ratio, averaging 34 per cent in 2024-2025. However, this ratio will remain one of the highest among ‘B’ rated sovereigns, indicating persistent fiscal challenges.

Furthermore, Nigeria has made significant progress in exchange rate reforms. The gap between the official and parallel market exchange rates has narrowed, reflecting improved market confidence. Fitch commends Nigeria’s commitment to a more flexible exchange rate regime but cautions that the pace of reforms will be crucial in stabilising the foreign exchange market and supporting investor confidence.

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