Nigeria’s reserve, as of July 16, 2024, has increased to $36.89 billion.
Gatekeepers News reports that Governor of Central Bank of Nigeria (CBN), Olayemi Cardoso revealed this during an engagement with Senate Committee on Banking, Insurance, and Other Financial Institutions in Abuja on Friday.
He noted that CBN’s monetary policies and actions have stimulated growth and stability in the nation’s economy.
Cardosa said the country’s external reserves of June ending, could finance over 11 months of imports for goods and services, or 14 months for goods alone.
He emphasised that this is significantly higher than the international benchmark of 3.0 months, indicating a strong buffer against external shocks.
Also, Cardosa noted that the banking sector remains robust and diverse, comprising 26 commercial banks, six merchant banks, and four non-interest banks.
He said, “The spread between official and BDC rates has narrowed significantly from N162.62 in January to N47.22 in June indicating successful price discovery, increased market efficiency and reduced arbitrage opportunities.”
“The stock of external reserves increased to 36.89 billion dollars as of July 16, compared with 33.22 billion dollars as at end-Dec 2023, driven largely by receipts from crude oil-related taxes and third-party receipts. In the first quarter of 2024, we maintained a current account surplus and saw improvements in our trade balance.”
The CBN Governor noted that while the Apex bank was encouraged by positive trends, it remained vigilant and committed to implementing policies that support sustainable growth in the financial markets and maintain overall economic stability.
He assured committee members that the necessary measures and strategies had been mapped out to address emerging challenges.
To combat inflation, the CBN implemented a comprehensive set of monetary policy measures, which included raising the policy rate by 750 basis points to 26.25 percent, increasing cash reserve ratios, normalizing open market operations as the primary liquidity management tool, and adopting inflation targeting as the new monetary policy framework.
Speaking on area of banking supervision, Cardoso said that CBN had taken decisive actions to ensure the safety, soundness, and resilience of the banking industry.
The Key measures according to him include intervention in three banks, revocation of Heritage Bank’s license, increasing minimum capital requirements, and enhancing AML/CFT supervision.
He further noted that CBN planned to recapitalize deposit money banks in Nigeria to improve capital adequacy and their capacity to grow the economy.
According to Cardoso, the ultimate goal was to create a more stable, resilient, and efficient financial system that better serves the Nigerian economy while adhering to international best practices.
