The Central Bank of Nigeria (CBN) Governor, Mr. Olayemi Cardoso, said on July 16, 2024, that the nation’s foreign reserves had grown to $36.89 billion.
This was said by Mr. Olayemi Cardoso, the governor of the CBN, on Friday in Abuja at a meeting with the Senate Committee on Banking, Insurance, and Other Financial Institutions. He stated that the country’s economy has grown and become more stable as a result of the CBN’s monetary policies and operations.
By the end of June, he claimed, the country’s foreign reserves will be sufficient to cover more than 11 months’ worth of imports of commodities and services or 14 months’ worth of only products.
This, according to Cardoso, is noticeably more than the 3.0 month worldwide standard, suggesting a robust defence against outside shocks.
Along with it, he mentioned how strong and varied the banking industry still is, with 26 commercial banks, 6 merchant banks, and 4 non-interest banks.
“There has been a significant narrowing of the spread between official and BDC rates from N162.62 in January to N47.22 in June, indicating successful price discovery, increased market efficiency, and reduced opportunities for arbitrage,” the speaker stated.
“The stock of external reserves increased to 36.89 billion dollars as of July 16 from 33.22 billion dollars as of the end of December 2023, mostly due to receipts from third-party receipts and taxes related to crude oil. In the first quarter of 2024, we maintained a current account surplus and improved our trade balance.”
Cardoso stated that although the CBN was heartened by encouraging developments, it remained watchful and dedicated to putting policies into place that promote long-term financial market expansion and uphold general economic stability.
Initiatives to address financial difficulties
He reassured committee members that the appropriate actions and plans had been developed to deal with new problems.
The CBN implemented a comprehensive set of monetary policy measures to counteract inflation. These measures included raising the policy rate to 26.25 percent by 750 basis points, increasing cash reserve ratios, normalising open market operations as the main tool for managing liquidity, and implementing inflation targeting as the new framework for monetary policy.
Cardoso emphasised that the CBN has taken strong measures to guarantee the stability, safety, and resilience of the banking sector in the area of banking supervision. AML/CFT supervision was improved, minimum capital requirements were raised, Heritage Bank’s license was revoked, and three banks were intervened in.
He stressed that to increase capital adequacy and the deposit money banks’ potential to spur economic growth in Nigeria, the CBN intended to recapitalize them. As per Cardoso, the ultimate objective was to establish a financial system that is more resilient, stable, and efficient, and that better serves the Nigerian economy while complying with global best practices.
What to note
Checks on the CBN’s external foreign reserve portal show that contrary to the governor’s statements, external reserves have increased to $36.89 billion. As of July 16, the external reserve, which Governor Cardoso had mentioned, was $35.77 billion. On July 17, 2024, it increased to $35.93 billion.
The nation’s foreign reserve has surpassed $35 billion for the first time under President Bola Tinubu’s administration, according to a previous report from The News Chronicles.
