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Sunday, June 26, 2022

Nigeria’s Central Bank Dollar Reserves Cross $40bn for First Time in 2 years

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The Central Bank of Nigeria’s (CBN) dollar reserves have risen past the psychological $40 billion level for the first time since 2019.

The CBNs gross dollar reserves stood at $41.75 billion as at October 26th. The last time it neared that level was on October 16th 2019, data from the CBN shows.

Data shows that the CBN dollar reserves are up 24 percent in the past 2 months alone.

Higher Brent crude oil prices which have hit a high of $85 per barrel, a recent Eurobond issuance and $3.4 billion extended to Nigeria under the International Monetary Fund’s (IMF) global $650 billion Special Drawing Right (SDR) have all helped to swell the dollar reserves.

This has helped to maintain relative Naira stability and higher liquidity at the investor and exporters (I&E) window of the foreign exchange (FX) market.

The Naira closed at N415 per dollar on the I&E window on Wednesday (Oct 27th), while liquidity (turnover) jumped by 58.5 percent in September to $4.47 billion, compared to the month earlier (August), according to data from FMDQ.

At the just concluded Monetary Policy Committee (MPC) meeting of the apex bank in September, the members applauded the CBN for improving foreign exchange supply in the economy to meet legitimate business and consumer demand.

Members thus, urged the Bank to take further steps to restrict the activities of unauthorised and illegal dealers in the foreign exchange market, stating that all foreign exchange transactions must be conducted at the I&E window to ensure transparency and stability.

“The Bank is encouraged to sustain the implementation of measures focused on demand/ supply side management and sanitizing the foreign exchange market in order to improve FX supply and drive further external sector improvements,” Aishah Ahmad, a member of the MPC and CBN Deputy Governor, said.

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