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Tag: external reserves

  • $42bn external reserves enough for nine months of imports, says CBN

    $42bn external reserves enough for nine months of imports, says CBN

    The Central Bank of Nigeria (CBN) has confirmed that the country’s $42 billion external reserves are sufficient to finance imports of goods and services for over nine months.

    CBN governor, Olayemi Cardoso made the statement while presenting a performance index report to the Senate Committee on Banking, Insurance, and other Financial Institutions, chaired by Senator Adetokunbo Abiru, at the National Assembly in Abuja on Wednesday. 

    The governor also reassured Nigerians of improved economic prospects in 2025.

    “External Reserves rose from $38.35bilion in September to $42.01billion as of December 12, 2024,” he said.

    The increase in external reserves within the stated period, he explained, was fueled largely by receipts from crude oil related taxes and third party receipts in Q3 2024.

    “We maintained a current account surplus and saw remarkable improvements in our trade balance.

    “Our external reserves level can finance over 9.09 months  of import of goods and services or 13.91 months only, higher than the international benchmark of 3.0 months and a robust buffer against shocks,” he said.

    On cash shortage, the CBN Governor reiterated application of new policy of N150million fine against any branch of Banks caught indulging in illegal distribution of new Naira notes to currency hawkers and unscrupulous elements.

    Read Also: CBN sets N100,000 daily maximum cash-out limit for PoS operators

    He added that the Nigeria economy will take a better shape in the 2025 fiscal year, through policies and measures already in emplaced.

    “Distinguished Senators, as we conclude this briefing, I want to highlight that despite the challenges facing our economy, there are clear reasons for optimism.

    “The gradual stabilization of the forex market, ongoing banking sector recapitalization, positive growth trends in key sectors, especially the services sector, indicate a path toward recovery and stability,” he said.

    The Chairman of the Committee, Senator Adetokunbo Abiru (APC – Lagos East), in his response, said the CBN deserved commendation.

  • Nigeria’s external reserves surge to $35.77b

    Nigeria’s external reserves surge to $35.77b

    • Apex bank intervenes in foreign exchange market, sells $106.5m to dealer banks

    Nigeria’s external reserves increased to $35.77 billion from the $33.09 Billion at the end of 2023, a data from the Central Bank of Nigeria (CBN)  on the country’s external reserves movement has revealed.

    The figure released on Thursday signifies a $2.68 billion increase in the country’s external reserves in the past six months.

    The data revealed that the country’s foreign reserve crossed the $35.05bn on July 8 to the $35.77 mark on Thursday.

    The CBN has, however,  projected that the country’s external reserves could reduce slightly in the course of the year.

    The apex bank disclosed this in the recently released maiden edition of its ‘Macroeconomic Outlook: Price Discovery for Economic Stabilisation’ report.

    The bank attributed the projected decline in the country’s reserves to debt service and other obligations.

    The outlook said, “The external reserves, which stood at $33.09bn in 2023 could reduce slightly in 2024. This is on the assumption of continued payments of outstanding foreign exchange forward obligations, matured foreign exchange swaps, and debt service. The expected improvement in crude oil earnings, together with recent reforms in the foreign exchange market and energy sector, however, would cushion the drop in external reserves.”

    Meanwhile, the CBN has started selling foreign exchange on a regular basis through Authorized Dealer Banks and licensed Bureaux De Change (BDCs) as a response to the current fluctuations in the foreign exchange market.

    Read Also: Expert decries dwindling state of external reserves

    These fluctuations are primarily caused by the demand pressure coming from corporate entities and the seasonal increase typical during the summer period.

     By implementing regular sales of foreign exchange, the CBN aims to stabilize the market and ensure smoother transactions for both businesses and individuals involved in foreign exchange activities.

     Dr. Omolara Omotunde Duke Director, Financial Markets Department of the CBN issued a statement yesterday night assuring the public of the bank’s commitment to address the demand pressure and stabilize the foreign exchange market.

     As part of its efforts, the CBN will continue to provide liquidity support to various segments of the official markets in the coming weeks.

     Highlighting recent transactions, the CBN disclosed that it sold a total sum of US$106,500,000.00 to 29 authorized dealer banks on Thursday, July 18 and Friday, July 19, 2024.

     These transactions took place within an exchange rate range of N1,498.00/US$1 to N1,530.00/US$1. Additionally, the CBN purchased US$9,500,000 (Nine Million and Five Hundred Thousand Dollars) from four authorized dealer banks at rates between N1,510.00/US$1 and N1,550.00/US$1. All these transactions are marked for settlement on July 19, 2024.

     The Central Bank also stated its commitment to closely monitor compliance with existing trading rules and regulations by authorized dealer banks. This is seen as an effort to promote ethical conduct and ensure stability in the foreign exchange market.

     The general public was also advised to direct their foreign exchange demands to their respective banks and BDC operators, adhering to prevailing market regulations.

     With the regular sale of foreign exchange and ongoing monitoring of trading practices, the CBN aims to meet demand pressure, foster stability, and sustain a well-functioning foreign exchange market.