CBN: Nigeria’s External Reserves Decline By 0.68%

The Central Bank of Nigeria (CBN) has released data stating that Nigeria’s external reserves have declined by 0.68 percent to $36.620 billion as of August 12, 2024, down from $36.872 billion on August 7, 2024.

This decrease follows an earlier increase to $37.88 billion on July 15, 2024, up from $34.76 billion in June 2024.

In July, the CBN forecast a slight reduction in Nigeria’s external reserves for 2024. This projection was made in the inaugural edition of its ‘Macroeconomic Outlook: Price Discovery for Economic Stabilisation’ report.

“External reserves, which stood at $33.09 billion in 2023, could decrease slightly in 2024, assuming continued payments of outstanding foreign exchange forward obligations, matured foreign exchange swaps, and debt servicing.

However, expected improvements in crude oil earnings, coupled with recent reforms in the foreign exchange market and energy sector, are expected to cushion the decline in external reserves.”

On July 8, Nigeria’s foreign reserves surpassed $35.05 billion for the first time in nearly a year and have remained above this level since.

CBN Governor Olayemi Cardoso, addressing possible solutions to the decline, stressed the importance of closely monitoring developments in the foreign exchange markets.

He noted that the short- to medium-term outlook for the exchange rate is crucial given its significant impact on inflation.

“The recent stability of the exchange rate is due to increased market confidence in the Monetary Policy Committee’s (MPC) efforts to bring inflation within target. However, this fragile equilibrium must be carefully managed to sustain recent stability and attract more capital flows.”