CBN Reports $40.2bn External Reserves Targets $1bn Monthly Remittances

CBN Reports $40.2bn External Reserves Targets $1bn Monthly Remittances

The Central Bank of Nigeria (CBN) announced that the country’s external reserves have surged to $40.2 billion as of October 18, 2024.

CBN Deputy Governor for Economic Policy,……CONTINUE READING 

Mr. Muhammed Abdullahi, shared this development during a briefing with foreign investors on the sidelines of the ongoing IMF and World Bank annual meetings in Washington, D.C.

In his presentation, Mr. Abdullahi emphasized that the current reserve level is sufficient to cover 14.5 months of imports for goods and services or 18 months for goods alone. Additionally, foreign exchange inflows into Nigeria amounted to $57 billion by August 2024.

He noted that capital importation almost doubled, reaching $6.9 billion as of August 2024, compared to $3.9 billion recorded in the 2023 fiscal year. The Deputy Governor further highlighted the positive impact of efforts to increase remittances from Nigerians in the diaspora, with monthly inflows now at $650 million. Total diaspora remittances hit a record $3.5 billion, surpassing the annual performance of $3.2 billion in 2023.

Mr. Abdullahi affirmed that CBN is on track to achieve its target of $1 billion in monthly remittances. He also noted that the bank’s interventions in the foreign exchange market had reduced to just 5 percent of the market turnover.

While occasional interventions in the FX market may occur, the CBN aims to ensure the market does not rely on them, he added. By December, the market will see a more transparent matching system, allowing participants to view transactions in real-time.

Reflecting on the long-term issues in the FX market, Mr. Abdullahi said the challenges faced today are the result of a market that has been broken for about a decade.

In response to questions from investors, CBN Governor Mr. Olayemi Cardoso assured them that the current FX management system is designed to encourage Nigerians and investors to bring in foreign currency without hurdles.

He added, “As interest rates rise, we expect more interest in local investments, which is already happening. The situation now encourages Nigerians to produce locally, as it’s more cost-effective than relying on imports—this is a positive development.”

Speaking on the harmonization of FX rates, Mr. Cardoso mentioned that remittances from the diaspora have surged because individuals no longer need to resort to unofficial channels for sending money home, contributing to the increase in inflows.