Nigeria’s External Reserves Hits $40.2 Billion – CBN

The Central Bank of Nigeria (CBN) has announced that the country’s external reserves have climbed to $40.2 billion as of October 18, 2024. This update was provided by Mr. Muhammed Andullahi, Deputy Governor of Economic Policy, during a briefing with foreign investors at the ongoing annual meetings of the IMF and World Bank in Washington, D.C.

Andullahi noted that the current reserves could cover 14.5 months of goods and services imports, or 18 months for goods alone. Additionally, foreign exchange inflow into Nigeria has reached $57 billion as of August 2024.

He reported a significant increase in capital importation, which nearly doubled to $6.9 billion this year, compared to $3.9 billion in the 2023 financial year.

Efforts to boost remittances from Nigerians in the diaspora are also showing promising results, with current monthly remittances totaling $650 million and reaching a record $3.5 billion so far this year, surpassing the annual total of $3.2 billion in 2023. The CBN aims to achieve a target of $1 billion in monthly remittances.

The Deputy Governor further mentioned that CBN interventions in the foreign exchange market have decreased to just 5% of market turnover. While the bank may occasionally intervene, it is committed to ensuring the market does not become reliant on such measures.

Starting in December, the foreign exchange market is expected to implement a matching system, enhancing transparency in trading. Andullahi emphasized that the FX market has been dysfunctional for about a decade, and the current developments are a response to this prolonged issue.

During the Q&A session, CBN Governor Mr. Olayemi Cardoso reassured investors that the current FX administration is designed to facilitate easier currency inflows for both Nigerians and foreign investors.

He highlighted that rising interest rates are fostering greater confidence in the local currency and encouraging local production over reliance on imports, which he views as a positive trend. Furthermore, he noted that the harmonization of exchange rates has made sending money to Nigeria more straightforward, contributing to the increase in remittance inflows.