Nigeria’s foreign reserve rose to $35.05bn as of Monday, the latest data from the Central Bank of Nigeria has revealed.
According to the data available on the website of the apex bank, the current level of the reserves marks a return to the early days of the President Bola Tinubu administration when the reserves stayed above the $35bn mark.
The data revealed that Nigeria’s external reserves had last crossed the $35bn mark under the Tinubu administration on June 2, 2023, when it stood at $35.02bn.
A day after Tinubu’s inauguration, the reserve was $35.09bn.
From that time, the reserves have failed to reach $35bn. It has also been a rough year for the naira which was officially floated on June 14 as the CBN harmonised segments of the currency market.
Since the harmonisation of the segments of the market, Bloomberg said that the local currency has lost about 70 per cent of its value against the United States of American dollar.
For most of Tinubu’s first year in office, the foreign reserves had stayed between $32bn and $34bn.
On April 19, Nigeria’s foreign reserves dropped to $32.11bn. The decline stirred speculation that the CBN was intervening in the currency market to defend the naira.
However, at the last IMF Spring meeting, the central bank governor, Dr Olayemi Cardoso, denied such claims.
He said, “As much as I have read in the recent few days, some opinions with respect to what is happening with our reserves, and the central bank defending the naira, if you think back to what our overall policy and philosophy has been, you can see is counterintuitive.
“What we’re encouraging is for the markets to a willing buyer, willing seller, price discovery and ultimately, I perceive a future where the central bank will really not need to intervene, except in very, very unusual circumstances. What is important to us is that there’s sufficient liquidity in the market which I’ve spoken about here today… and that will continue. So, as long as we have a vibrant currency market, why do we need to go in there to intervene? We don’t need to.”
Since the low levels of April 19, Nigeria’s external reserves have appreciated by $2.98bn to reach new heights.
Meanwhile, members of the Monetary Policy Committee of the CBN have set their eyes on improving liquidity in the foreign exchange market.
This was indicated by the personal statements of the members from the 295th meeting of the committee in May, which was recently published by the CBN on its website.
At the meeting, the members raised the MPR to 26.25 per cent while retaining other policy parameters.
