Central Bank of Nigeria says the country’s
foreign exchange reserves have hit a high of $34.7bn.
The CBN’s claim is backed by data obtained from its website on Sunday.
This represents an increase of $110m from the previous day’s figure of $34.5bn.
The reserves have been steadily increasing over the past week, with a total gain of $316m since July 1.
This growth has been attributed to several factors, including the recent increase in oil prices, improved diaspora remittances, and the Central Bank’s efforts to stabilise the currency.
Experts believe that the increase in foreign exchange reserves is a positive development for Nigeria’s economy, as it provides a cushion against external shocks and supports the country’s ability to meet its financial obligations.
A recent Fitch Ratings has placed Nigeria’s economic outlook to positive, citing significant reforms that have restored macroeconomic stability and enhanced policy coherence and credibility.
Fitch said, “The positive outlook partly reflects reforms over the last year, which have reduced distortions stemming from previous unconventional monetary and exchange rate policies.”
Central Bank has implemented various measures to manage the foreign exchange market, including the introduction of the Investors’ and Exporters’ window, which has helped to attract foreign investment and boost reserves.
The reforms have led to a return of sizeable inflows to the official foreign exchange market and a significant rise in foreign portfolio investment inflows.
However, Fitch noted that short-term challenges remain, including high inflation and FX market volatility. Despite this, the agency expects further monetary policy tightening and strengthening of monetary policy transmission.
“The reforms have contributed to the restoration of macroeconomic stability and enhanced policy coherence and credibility.
“However, we see significant short-term challenges, notably high inflation, and the FX market has yet to stabilize, and the durability of the commitment to reform is to be tested,” Fitch stated.
