Nigeria’s foreign exchange reserves have continued to show a steady increase, according to recent data from the Central Bank of Nigeria.
As of June 20, 2024, the country’s FX reserves stood at $33.6bn, representing a significant increase from $32.7bn on June 3, 2024.
This steady increase in FX reserves is a welcome development for Nigeria’s economy, which has been grappling with currency fluctuations and a decline in foreign investment in recent years.
The improvement in FX reserves can be attributed to a combination of factors, including increased crude oil prices, improved export earnings, and the CBN’s efforts to manage the nation’s currency.
The data showed that Nigeria’s FX reserves have been steadily increasing over the past two weeks, with a daily average increase of $150m.
This trend is a departure from the previous months, where the reserves had been fluctuating due to various economic factors.
The increase in FX reserves is expected to have a positive impact on Nigeria’s economy, as it will provide a cushion for the country to meet its foreign exchange obligations, including the payment of foreign debts and the importation of goods and services.
Additionally, the increase in FX reserves will also help to boost investor confidence in the Nigerian economy, which has been a major challenge in recent years.
The CBN has been working to manage the nation’s currency and maintain a stable exchange rate, despite the challenges posed by the COVID-19 pandemic and the decline in global oil prices.
The bank has implemented various measures, including the introduction of a flexible exchange rate regime and the restriction of access to foreign exchange for certain goods and services.
The steady increase in FX reserves is a testament to the effectiveness of these measures and a sign that Nigeria’s economy is on the path to recovery.
Meanwhile, the CBN recently attributed the three-month consecutive decrease in inflation rates to the effectiveness of its monetary policy.
The recent decrease saw 13 states of the federation reducing their rates.
According to the National Bureau of Statistics, the headline month-on-month inflation rate decreased to 2.14 per cent in May, down from 2.29 per cent in April and 3.02 per cent in March.
Food inflation also fell for the third consecutive month to 2.28 per cent in May.
The Deputy Governor of the Economic Policy Directorate at the CBN, Muhammad Abdullahi, stated, “Slowly but surely, the inflation tide is turning. We will continue to work diligently with coordinated policy measures to ensure that the worst of the inflationary cycle is behind us in the nearest future.”
The CBN’s efforts to combat inflation have been ongoing since February, and the monthly numbers indicate a positive trend. While year-on-year inflation continues to rise, the monthly rates show a slowdown in price increases for essential goods.
An economist at Phemmy Gracey Limited Olorunfemi Idris said, “The steady increase in Nigeria’s FX reserves is a positive development for the country’s economy, and it is expected to have a positive impact on the nation’s currency and overall economic stability.
“However, the country still faces significant economic challenges, and the government and the CBN must continue to work together to address these challenges and ensure a sustainable economic recovery.”
