CBN Governor announces Nigeria’s external reserves have climbed to $36.89bn. Discover the factors behind this increase and its economic impact.
As of July 16, 2024, the reserves have amounted to $36.89 billion per CBN Governor Olayemi Cardoso’s statement.
During a briefing with the Senate Committee on Banking, Insurance, and other Financial Institutions in Abuja, Cardoso declared this.
Several encouraging economic indicators were emphasized by him, one being a notable decrease in the difference between Bureau De Change (BDC) rates and official rates. This gap has diminished from N162.62 in January to N47.22 in June 2024, indicating an improved market efficiency with fewer opportunities for arbitrage available.
Cardoso addressed the committee, stating that there are several measures and strategies implemented to tackle the emerging economic challenges. He highlighted that an increase in external reserves has occurred since December 2023, reaching $33.22 billion mainly due to revenues from crude oil-related taxes and third-party receipts.
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Cardoso stated that during the initial three-month period of 2024, our current account exhibited a surplus while also witnessing enhancements in our trade balance. He further revealed that as of June 2024, our reserves are adequate for sustaining imports of goods and services for over eleven months or fourteen months specifically for importing goods; surpassing the global standard benchmark of only three months. Hence, this serves as a robust shield against any unforeseen external disturbances.
Cardoso highlighted the strength and versatility of Nigeria’s banking industry, comprising twenty-six commercial banks, six merchant banks, and four non-interest banks. He noted considerable advancements in crucial metrics such as capital adequacy, liquidity levels, and ratio of non-performing loans to affirm that the sector is experiencing increased stability and resilience.
The equity market’s remarkable performance caught the governor’s attention, as observed by a 33.81 percent increase in the All-Share Index and a corresponding rise of 38.33 percent in market capitalization between December 2023 to June 2024. Such gains signify increasing investor trust and assurance towards this sector.
Cardoso recognized the constructive advancements and reassured that the CBN’s dedication to maintaining policies fostering sustainable growth within financial markets, as well as general economic stability stands firm.
The session was inaugurated by Senator Adetokunbo Abiru, the Senate Committee Chairman who emphasized that the main objective of the discussion was to obtain current information on monetary policy from CBN’s endeavors, undertakings and designs.
