• Friday, September 29, 2023
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External reserves to cover 8months of import of goods, services – Emefiele

Riding on the back of the tiger

Nigeria’s external reserves currently stand at $36 billion and are sufficient to cover 8months of import of goods and services, Godwin Emefiele, governor of the Central Bank of Nigeria (CBN) said on Tuesday.

He said with the decline in the country’s foreign exchange earnings and subsequent adjustments in the value of the naira vis-à-vis the US dollar, the CBN has continued to implement a demand management framework, which is designed to support improved production of items that can be produced in Nigeria, and further conservation of our external reserves.
These measures he said have helped to prevent a significant decline in our reserves.

He spoke at at the 13th annual Chartered Institute of Bankers of Nigeria (CIBN) Banking and Finance Conference in Abuja and Lagos.

Emefiele said the band between the parallel market and the official exchange rate over the past month, has narrowed recently due to some of the measures taken by the CBN to curb illegal fx transactions.

The drop in crude oil earnings as well as the drop in foreign portfolio inflows significantly affected the supply of foreign exchange into Nigeria. In order to adjust for the decrease in supply of foreign exchange, the naira depreciated at the official window from N305/$ to N360/$ and to N380/$. These adjustments along with increased efforts to restrict undue speculative activities, has led to a growing unification of rates across all the FX market segments.

Naira was stable at N460 on the black market on Tuesday. The local currency gained N1.00k as the dollar was sold at N461 on Tuesday as against N462 sold on the previous day at the Bureau De Change segment.

The foreign exchange opened on Tuesday with an indicative rate of N386.50k at the Investors and Exporters (I&E) forex window. This signals N0.12k deprecation when compared with N386.38k opened with on Monday, data from the FMDQ revealed.

Daily FX turnover rose significantly by 1,540.56 percent to $340.58 million on Monday from $20.76 million recorded on Friday last week, data from FMDQ revealed.

Emefiele noted that the impact of the pandemic and the resulting slowdown in economic activity, led to a significant outflow of funds from emerging market economies.

Nigeria was not exempted from the drop-in flows, as capital importation into the country declined from $6bn in Q2 of 2019 to $1.2bn in Q2 of 2020, he said.

In his welcome address, Bayo Olugbemi, president and Chairman of council, CIBN, said business continuity plan under the COVID-19 challenges has been focused on enhancing competency and quality services to the teeming members and stakeholders through adoption and adaptation of high-level digital applications.

“There is no gain saying that the future of banking is digitisation,” he said.