Lucky Obukohwo Reporting
The Central Bank of Nigeria (CBN) has said Nigeria’s external reserves, as at July 8, have hit $35.05 billion, marking the highest level since May 30, 2023.
The laudable achievement is said to be the first under President Bola Tinubu, whose administration began on May 29, 2023, when the reserves were approximately $35.09 billion.
The Central Bank of Nigeria (CBN) attributes this increase to recent FX policies and significant financial inflows from institutions like Afreximbank and the World Bank.
The reserves had dipped to $34.66 billion following the CBN’s FX unification policy in June 2023 and fluctuated within the $33 billion range from July to December 2023, hitting a low of $32.11 billion on April 19, 2024.
The decline was primarily due to debt repayments and other financial obligations, as explained by the Apex Bank Governor at the IMF Spring meeting.
However, a steady upward trend has been observed since then, with reserves rising by $2.94 billion in less than three months.
This growth aligns with a period of exchange rate stability and increased financial commitments to Nigeria. For instance, Afrexim Bank recently disbursed $925 million as part of a $3.3 billion loan agreement with NNPC, bringing the total payment to $3.175 billion.
Additionally, the World Bank approved $2.25 billion in loans to support Nigeria’s economic stability and vulnerable populations.
Despite this progress, Fitch Ratings has noted the lack of clarity regarding the exact size and composition of Nigeria’s FX reserves, posing a challenge to the nation’s sovereign credit profile.