Nigeria's foreign exchange (FX) reserves have reached their highest level since March 28, 2024, signaling a significant financial milestone for the country. This achievement coincides with the longest period of stable exchange rates seen in over a year.
As of June 19, 2024, the Central Bank of Nigeria (CBN) reported that the FX reserves stand at $33.58 billion. This marks a notable recovery since the end of March 2024 when the reserves were at $33.83 billion before experiencing a period of decline.
The recent surge in FX reserves follows a period of noticeable fluctuations, with a low of $32.11 billion recorded on April 19, 2024. This decline raised concerns about the nation's financial stability.
However, since then, there has been a gradual and consistent upward trajectory, coinciding with a period of exchange rate stability. The official exchange rate has averaged N1,481/$1 this month and has remained within a narrow band of plus or minus 0.06%.
The increase in FX reserves over the past two months, amounting to $1.47 billion, is a positive development for the country's external reserves. The CBN's implementation of policies to attract forex liquidity has contributed to this growth. Improved liquidity in the forex turnover has also been observed, with the average turnover for June reaching $199 million daily compared to $168 million in the same period in May.
The Monetary Policy Committee (MPC) has urged the CBN to focus on boosting the external reserves, recognizing their importance for the country's economic stability. Efforts to attract foreign exchange inflows, such as doubling diaspora remittances and securing loans from international institutions like the World Bank and Afrexim Bank, have contributed to stabilizing the forex market.
The recent approval of $2.25 billion in loans by the World Bank aims to support Nigeria's economic stability and assist vulnerable populations. These financial measures, combined with the steady increase in FX reserves, provide a buffer to mitigate potential shocks and support the country's economic recovery efforts.
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