market is willing to pay for in us dollars. when such supply surpasses demand, the exchange rate appreciates, causing the price of the dollar to fall. unfortunately, in nigeria, the contrary has taken place. in 1980, our import expenditure stood at us $ 16. 65 billion, while our exports amounted to us $ 25. 97 billion, resulting in a surplus of us $ 9. 32 billion. thus, during that year, we managed to fulfill the demand for us dollars from our existing supply and still had over us $ 9 billion in surplus. in such a situation, the exchange rate ( the value of the us dollar ) would not increase because, similar to any commodity, its supply surpassed the demand. moreover, from 2003 to 2013, we experienced a surplus of us $ 331. 73 billion in the economy, with oil exports alone contributing over us $ 798 billion. this surplus of dollars would typically stabilize the exchange rate, leading to a " strong " naira. regrettably, over the past 12 years, oil exports, constituting over 90 percent of our foreign exchange earnings, have declined from us $ 93. 89 billion in 2011 to us $ 31. 4 billion in 2020. 4 / 5 bis - central bankers'speeches from the aforementioned points, we can infer that the genuine issue impacting the exchange rate is the simultaneous decrease in the supply of, and increase in the demand for, us dollars. it also seems that the task of stabilizing the exchange rate, while an official mandate of the cbn, would necessitate efforts beyond the bank itself and indeed to an attitudinal change of all our citizens. concluding remarks honourable members, my team and i are dedicated to refocusing the bank by giving primacy to price stability. we also aim to build confidence in the nigerian economy through the maintenance of stability in consumer prices and the foreign exchange market. we are aware that the twin challenges of inflation and exchange rate depreciation on our economy are daunting, however, they are not insurmountable. monetary policy actions are sometimes inhibited by transmission lags, nonetheless, it is expected that the policy measures implemented by the bank will permeate the economy in the short - to medium - term. inflation pressures may persist, albeit temporarily, but are expected to moderate significantly by q4 2024. exchange rate pressures are also expected to reduce with the smooth functioning of the foreign exchange market. we are committed to

nonremittance of crude oil earnings to the cbn, increased capital outflows, and excess liquidity from fiscal activities. the shift to a market - driven exchange rate was intended to create a stable macroeconomic environment and discourage currency hoarding. however, short - term volatilities are attributed to arbitrage and speculation. to address exchange rate volatility, a comprehensive strategy has been initiated to enhance liquidity in the fx markets. this includes unifying fx market segments, clearing outstanding fx obligations, introducing new operational mechanisms for bdcs, enforcing the net open position limit, and adjusting the remunerable standing deposit facility cap. honourable members, we understand the economic costs of these developments not just for the economy, but also as they affect ordinary nigerians. however, as i have mentioned in previous engagements, these costs are temporary, and our decisions will address a lot of fundamental issues bothering nigeria's macroeconomic landscape. honourable members, these measures, aimed at ensuring a more market - oriented mechanism for exchange rate determination, will boost foreign exchange inflows, stabilize the exchange rate, and minimize its pass - through to domestic inflation. on the exchange rates, permit me to say that put simply, the exchange rate is determined by the dynamics of supply and demand for a product or service. in essence, similar to the pricing of cows or cars, the value of the us dollar in nigeria is determined by the balance of us dollars entering the country and the demand for us dollars among nigerians. applying this demand and supply principle, let's examine how the exchange rate has performed in recent years. the exchange rate in nigeria has increased / depreciated due to the simultaneous occurrence of two factors : a decline in the supply of us dollars coinciding with a surge in the demand for us dollars. looking at the demand side of the exchange rate, it's important to note the growing number of nigerian students studying abroad. in the 1980s and 1990s, the need for us dollars for their living expenses was minimal. however, recent data shows a significant change. according to unesco's institute of statistics, the number of nigerian students abroad increased from less than 15, 000 in 1998 to over 71, 000 in 2015. by 2018, this figure had reached 96, 702 students, as per the world bank. another report projects the number of nigerian students studying abroad to exceed 100, 000 by 2022. additionally, the uk's higher education stat