Mr. Olayemi Cardoso, the Governor of the Central Bank of Nigeria, announced that Nigeria’s external reserves have surged to $36.89 billion as of July 16, 2024.
He made this declaration during a session with the Senate Committee on Banking, Insurance, and Other Financial Institutions in Abuja on Friday, highlighting the effectiveness of CBN’s monetary policies in fostering economic growth and stability.
Cardoso underscored that as of the end of June, Nigeria’s external reserves could cover over 11 months of imports for goods and services, or 14 months for goods alone, surpassing the international benchmark of 3.0 months. This robust reserve level provides a substantial buffer against external economic shocks.
In addition to the reserve increase, Cardoso pointed out the resilience of Nigeria’s banking sector, which comprises 26 commercial banks, six merchant banks, and four non-interest banks. He noted a significant reduction in the spread between official and BDC rates from N162.62 in January to N47.22 in June, indicating improved market efficiency and reduced arbitrage opportunities.
Cardoso attributed the growth in external reserves to receipts from crude oil-related taxes and third-party transactions, highlighting a current account surplus and improved trade balance in the first quarter of 2024.
While expressing optimism about these positive developments, Cardoso emphasized the CBN’s vigilance in maintaining sustainable growth and economic stability. He detailed comprehensive monetary policy measures to combat inflation, including raising the policy rate, increasing cash reserve ratios, and adopting inflation targeting.
In terms of banking supervision, Cardoso outlined decisive actions taken by the CBN to ensure the safety and resilience of the banking industry, such as intervening in troubled banks and enhancing supervision standards.
Plans to recapitalize deposit money banks aim to bolster their capacity to support economic growth and adhere to international standards.
Despite the Governor’s announcement, recent checks on the CBN’s external foreign reserve portal indicate slight discrepancies in reported figures, highlighting ongoing scrutiny and transparency concerns. However, Cardoso reassured stakeholders of the CBN’s commitment to addressing emerging challenges and promoting a stable financial system aligned with global best practices.
