Nigeria’s external reserves fell by 0.68% to $36.62 billion as of August 12, 2024, from $36.87 billion recorded on August 7, 2024, according to data from the Central Bank of Nigeria (CBN). This decline follows an increase to $37.88 billion on July 15, 2024, up from $34.76 billion at the end of June 2024.
In its July report, the CBN had projected a slight reduction in external reserves for 2024, attributing this to ongoing debt service and other financial obligations. The report indicated that while reserves might decrease, improvements in crude oil earnings and recent economic reforms are expected to cushion the decline.
The CBN’s projection came after Nigeria’s foreign reserves crossed the $35 billion mark on July 8, 2024, a threshold maintained since then. Bala Moh’d Bello, a member of the Monetary Policy Committee (MPC), highlighted the importance of exchange rate stability for managing import prices and inflation.
He noted that the CBN’s efforts to stabilize the foreign exchange market have led to increased foreign portfolio investments and reduced rate volatility.
Lydia Shehu Jafiya, another MPC member, reported a 38.26% increase in foreign exchange inflows between April and May 2024, driven by higher oil and non-oil receipts.
She noted that the reserves at the end of June 2024 were sufficient to cover 7.59 months of goods imports and 10.88 months of goods imports alone.
Mustapha Akinkunmi, also a member of the MPC, observed a depreciation of the naira to ₦1,605.50 on July 19, 2024, from ₦1,525.00 on June 28, 2024.
He projected that the reserves at the end of May 2024 would cover about 11 months of goods imports and 8 months of goods and services.
CBN Governor Olayemi Cardoso emphasized the need to closely monitor developments in the foreign exchange market.
He attributed the recent exchange rate stability to increased market confidence in the MPC’s efforts to control inflation. Cardoso cautioned that maintaining this fragile equilibrium is crucial to sustaining recent stability and attracting capital flows.
