External reserves hit 17-month high of $37bn, to boost investor confidence

Nigeria’s external reserves have risen to a 17-month high of $37.05 billion in July 2024 in a development likely to boost investor confidence.

The last time Nigeria had reserves slightly above $37 billion was February 2023, exactly 17 months ago, according to the Central Bank of Nigeria (CBN) data.

The latest reserves level was disclosed by Olayemi Cardoso, governor of the CBN, who said the amount rose from $34.19 billion in June. This was after the two-day Monetary Policy Committee (MPC) meeting in Abuja on Tuesday.

According to the MPC, the increase in the level of external reserves would further build confidence for a more stable exchange rate and thus urged the bank to explore available avenues to improve inflows, especially through diaspora remittances.

He said Diaspora remittances have gone up to $2.34 billion in 2024 compared to $1.8 billion last year, adding that FX inflows have risen to $38.88 billion from $37.93 billion in May 2024.

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Cardoso said there has been convergence in exchange rate between the official and parallel market. According to him, policies of the fiscal authority have helped to moderate food inflation and that there has been a positive outcome on the foreign exchange (FX) pass through as a result of the monetary policy.

Capital importation grew to $5.92 billion between January and may 2024 from $1.77 billion the corresponding period of 2023, he noted.

The CBN on Tuesday raised the monetary policy rate (MPR), also known as the benchmark interest rate, by 50 basis points to 26.75 percent with an eye on combating inflation and fostering a favorable climate for foreign investment.

The CBN also adjusted the asymmetric corridor from +100/-300 to +500/-100 around the MPR, retained the Cash Reserve Ratio (CRR) of Commercial banks at 45.00 percent, 14 percent for Merchant Banks, and held the liquidity ratio 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.

Hope Moses-Ashike and Eniola Olatunji

Hope Moses-Ashike is an Associate Editor, Banking and Finance, with more than a decade of experience reporting on Nigeria’s financial system and broader economy. She closely tracks market movements, monetary policy decisions, company disclosures, regulatory actions, economic indicators, and global developments, and interprets what they mean for businesses, investors, policymakers, and households. Her reporting helps readers understand complex issues such as inflation trends, foreign exchange market dynamics, interest rate decisions, bank performance, and investment risks. She also covers major international events and periodically travels to Washington, D.C., to report on the World Bank/IMF Spring and Annual Meetings. Her dedication to financial journalism has earned her multiple recognitions and invitations to high-level professional development programmes. She is an alumna of the International Visitors Leadership Programme (IVLP) in the United States and holds an Advanced Financial Journalism Certificate from the Press Association Training in London, UK. Her other notable achievements include completing the Lagos Business School CMC Programme, the Bloomberg Media Africa Initiative Programme, and a Master Class in Journalism at Rhodes University in South Africa.