The Governor of the Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso has stated that the country’s external reserve has increased to $36.89 billion as of July, 16 2024.
CBN Governor, Mr. Olayemi Cardoso, made this statement during an engagement with the Senate Committee on Banking, Insurance, and Other Financial Institutions in Abuja on Friday. He noted that the CBN’s monetary policies and actions have stimulated growth and stability in the nation’s economy.
According to him, the nation’s external reserves of the end of June, could finance over 11 months of imports for goods and services, or 14 months for goods alone.
Cardoso explained that this is significantly higher than the international benchmark of 3.0 months, indicating a strong buffer against external shocks.
He also 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.”
Cardoso mentioned that while the CBN 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.
Efforts to combat economic challenges
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.
In the area of banking supervision, Cardoso highlighted that the CBN had taken decisive actions to ensure the safety, soundness, and resilience of the banking industry. Key measures included intervention in three banks, revocation of Heritage Bank’s license, increasing minimum capital requirements, and enhancing AML/CFT supervision.
He emphasized that the CBN planned to recapitalize deposit money banks in Nigeria to improve capital adequacy and their capacity to grow the economy. The ultimate goal, according to Cardoso, was to create a more stable, resilient, and efficient financial system that better serves the Nigerian economy while adhering to international best practices.
What you should know
Despite the claims of the CBN Governor, that external reserves have risen to $36.89 billion, checks on the CBN’s external foreign reserve portal reveal that the external reserve as of July 16 quoted by the Governor Cardoso stood at $35.77 billion and rose to $35.93 billion on the 17th of July 2024.
Nairametrics earlier reported that the country’s foreign reserve has exceeded $35 billion, the first time under the administration of President Bola Tinubu.
