Nigeria’s External Reserves Surge to $40.2 Billion, CBN Reports
The Central Bank of Nigeria (CBN) announced an increase in the nation’s external reserves, now at $40.2 billion as of October 18, 2024. This milestone was shared by Mr. Muhammed Andullahi, the Deputy Governor for Economic Policy, during a briefing with foreign investors at the ongoing annual meetings of the International Monetary Fund (IMF) and World Bank in Washington, D.C.
In his presentation, Andullahi highlighted that the current reserve levels could support 14.5 months of goods and services imports, or an impressive 18 months for goods alone. This stability is underscored by a foreign exchange inflow of $57 billion recorded as of August this year.
Capital importation has also seen remarkable growth, nearly doubling to $6.9 billion as of August 2024, up from $3.9 billion in the previous financial year. Andullahi noted that efforts to boost remittances from the Nigerian diaspora are bearing fruit, with current monthly remittances averaging $650 million. In total, diaspora remittances have soared to a record $3.5 billion, significantly surpassing the $3.2 billion total for the entire year of 2023.
The CBN is on track to reach its ambitious target of $1 billion in monthly remittances, reflecting the central bank’s ongoing commitment to enhancing foreign exchange dynamics. Andullahi reported that CBN interventions in the foreign exchange market have been minimized to just 5% of market turnover, indicating a shift toward a more self-sustaining market.
Looking ahead, he announced plans for a new matching system set to launch in December, promising increased transparency in trading where market participants can clearly see who is buying and selling.
In a session with investors, CBN Governor Mr. Olayemi Cardoso reassured stakeholders about the effectiveness of the current foreign exchange administration. He emphasized that both Nigerians and investors bringing in foreign currency would face no difficulties in the revised system.
He noted, “With rising interest rates, we anticipate a greater inclination among Nigerians to invest in local instruments, which is beneficial as it encourages domestic production over reliance on imports.” This shift not only enhances local economic resilience but also fosters a healthier currency confidence among Nigerians.
Cardoso further pointed out that the harmonization of exchange rates has eliminated the need for unorthodox money transfer methods, resulting in a substantial increase in remittance inflows from abroad.
