In a significant development, the Central Bank of Nigeria (CBN) has announced that the country’s external reserves have increased substantially to $36.89 billion as of July 16, 2024. This was revealed by the CBN Governor, Mr. Olayemi Cardoso, during an engagement with the Senate Committee on Banking, Insurance, and Other Financial Institutions in Abuja.
The governor attributed the growth to the bank’s effective monetary policies and actions, which have stimulated economic growth and stability. The external reserves can now finance 11-14 months of imports, far exceeding the international benchmark of 3 months. This indicates a strong buffer against external shocks.
Cardoso also highlighted the banking sector’s robustness, comprising 26 commercial banks, 6 merchant banks, and 4 non-interest banks. He noted that the spread between official and BDC rates has narrowed significantly, indicating successful price discovery and increased market efficiency.
To combat inflation and maintain economic stability, the CBN has implemented various measures, including raising the policy rate and increasing cash reserve ratios. The bank has also taken decisive actions to ensure the safety and soundness of the banking industry, including intervention in three banks and revocation of Heritage Bank’s license.
The ultimate goal, according to Cardoso, is to create a more stable, resilient, and efficient financial system that serves the Nigerian economy while adhering to international best practices.