Nigeria’s Dollar Reserves Surge to $34.14bn as Naira depreciates over 300% in one year

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Nigeria’s foreign reserves have climbed to $34.14 billion as of Friday, marking a 4.06% increase from $32.74 billion recorded on June 3, 2024, according to data from the Central Bank of Nigeria (CBN).

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The recent rise in reserves is largely attributed to significant loans secured by the Federal Government from the World Bank. In May, the Bureau of Public Enterprises confirmed a $500 million World Bank loan aimed at strengthening Nigeria’s electricity distribution sector. Additionally, the World Bank announced a $2.25 billion support package to aid Nigeria in stabilizing its economy.

“This combined $2.25 billion package provides immediate financial and technical support to Nigeria’s urgent efforts to stabilize the economy and scale up support to the poor and most economically at risk,” the World Bank stated in a press release. “It further supports Nigeria’s ambitious, multi-year effort to raise non-oil revenues and safeguard oil revenues to promote fiscal sustainability and provide sufficient resources to deliver quality public services.”

Consequently, Nigeria’s external reserves have grown by over $1 billion within just one month.

Last year, Nigeria faced severe dollar shortages, prompting the CBN to float the naira in an effort to boost foreign exchange inflows. Subsequently, the local currency has depreciated significantly, reaching 1,514.31 naira per dollar at the Nigerian Autonomous Foreign Exchange market on Friday.

A Bloomberg report highlighted that the naira emerged as the worst-performing currency globally in the first half of 2024. Factors contributing to this included devaluation, inadequate dollar liquidity, and market volatility, which have hindered the CBN’s efforts to stabilize the currency.

“The naira’s performance ranks lowest among global currencies tracked by Bloomberg, alongside Lebanon’s pound amidst its ongoing economic crisis and dollarization,” the report noted.

Meanwhile, CBN Governor Olayemi Cardoso expressed cautious optimism about stabilizing the naira, stating, “I do believe that we have more or less seen the worst in terms of volatility,” in an interview with Bloomberg TV.

Despite ongoing challenges, the CBN has implemented various measures to enhance dollar supply and stabilize the naira. Recently, it allowed International Money Transfer Operators (IMTOs) access to the official forex window for the sale of foreign exchange, facilitating timely settlement of diaspora remittances. This move follows earlier actions by the CBN to restrict certain forex operations and subsequently resume dollar sales to bureau de change operators earlier this year.

Godwin Okafor, The Naija247news
Godwin Okafor, The Naija247newshttps://naija247news.com
Godwin Okafor is a veteran Financial Journalist, Internet Social Entrepreneur, and the visionary Founder of Naija247news Media Limited. With an extensive career spanning over 16 years in financial journalism, Godwin possesses a wealth of experience that seamlessly bridges both traditional and digital media landscapes. His journey in journalism commenced at Business Day, Nigeria, where he laid the foundation for his prolific career. In 2010, Godwin took a bold step by founding Naija247news Media, a platform that has since become a prominent player in delivering timely and accurate news. Educationally, Godwin Okafor holds a Bachelor's degree in Industrial Relations and Personnel Management from the prestigious Lagos State University, Ojo, Lagos. His commitment to continuous learning led him to the Lagos Business School, where he further honed his skills. Additionally, he is recognized as a Fellow of the University of Pennsylvania, having successfully completed the Wharton Seminar for Business Journalists. Throughout his illustrious career, Godwin has earned acclaim by winning numerous journalism awards, a testament to his dedication to excellence in reporting. Beyond his role as a Financial Journalist, Godwin Okafor wears the hat of the Chairman at Emmerich Resources Limited, the publishing entity behind Naija247news. His visionary leadership has played a pivotal role in shaping the media landscape and establishing Naija247news as a trusted source of information. Godwin Okafor's multifaceted expertise, commitment to journalistic integrity, and leadership in the realm of business journalism underscore his influential presence in both the media and entrepreneurial spheres.

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