ABUJA, July 23 – Nigeria’s external reserves rose to $37.05 billion in July 2024, marking the highest level in 17 months, according to Central Bank of Nigeria (CBN) Governor Olayemi Cardoso.
Thank you for reading this post, don't forget to subscribe!This increase from $34.19 billion in June is anticipated to bolster investor confidence.
The Monetary Policy Committee noted that higher reserves could stabilize the exchange rate and emphasized enhancing inflows through diaspora remittances, which have grown to $2.34 billion in 2024 compared to $1.8 billion last year.
Additionally, FX inflows increased to $38.88 billion from $37.93 billion in May 2024.
Cardoso highlighted a convergence in exchange rates between the official and parallel markets. He noted that fiscal policies have helped moderate food inflation and positively impacted the foreign exchange pass-through.
Capital importation grew to $5.92 billion between January and May 2024, up from $1.77 billion in the same period of 2023.
To combat inflation, the CBN raised the benchmark interest rate by 50 basis points to 26.75 percent and adjusted the asymmetric corridor.
The Cash Reserve Ratio (CRR) for commercial banks was retained at 45.00 percent and 14 percent for merchant banks, with the liquidity ratio held constant at 30.00 percent.
“The Committee was mindful of the effect of rising prices on households and businesses and expressed its resolve to take necessary measures to bring inflation under control.
It re-emphasized its commitment to the Bank’s price stability mandate and remained optimistic that despite the June 2024 uptick in headline inflation, prices are expected to moderate in the near term.
This is hinged on monetary policy gaining further traction, in addition to recent measures by the fiscal authority to address food inflation,” Cardoso said.
