“External Reserves Decline by $520.22 Million in 5 Weeks”-CBN - The Top Society

“External Reserves Decline by $520.22 Million in 5 Weeks”-CBN

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Nigeria’s external reserves have experienced a notable decrease of $520.22 million in the past five weeks, according to data obtained from the Central Bank of Nigeria (CBN). The figures, which were at $33.396 billion on October 31, 2023, declined to $33.004 billion as of December 7, 2023.
This reduction follows the CBN’s earlier disclosure that the reserves, starting at $37.07 billion on January 3, 2023, had fallen to $33.237 billion by September 29, 2023.
Governor of the CBN, Olayemi Cardoso, addressed this concerning trend during the Chartered Institute of Bankers of Nigeria’s 58th Annual Bankers’ Dinner and Grand Finale of the Institute’s 60th anniversary in Lagos. He highlighted the impact of declining crude oil production on Nigeria’s economic diversification, leading to decreased government revenue and foreign exchange inflows.
Cardoso emphasized the challenges facing the Nigerian economy, including high and rising inflation, insufficient foreign exchange supply, exchange rate depreciation, limited external reserves, weakened output, and elevated unemployment. These challenges have resulted in increased interest rates, discouraging investments in productive activities.
Within the banking sector, high inflation has affected asset quality and solvency ratios, while the continuous depreciation of the naira poses a significant risk for domestic banks with foreign exchange exposures.

“The removal of petrol subsidy and the adoption of a floating exchange rate, among other government policies, are anticipated to have positive effects on the economy in the medium-term.

“These measures are expected to enhance investor confidence, attract capital inflows, stimulate domestic investment, and ultimately improve the level of external reserves,” Cardoso added.

External reserves

Governor Cardoso expressed optimism regarding the government’s recent economic measures, including the removal of the petrol subsidy and the adoption of a floating exchange rate. He anticipates positive effects in the medium term, expecting these measures to enhance investor confidence, attract capital inflows, stimulate domestic investment, and ultimately improve the level of external reserves.
The CBN remains committed to addressing the economic challenges and implementing policies aimed at stabilizing the nation’s financial landscape. The evolving economic situation will continue to be closely monitored to adapt strategies for sustainable growth.
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