Recent data from the Central Bank of Nigeria indicates a steady increase in the country’s foreign exchange reserves. As of June 20, 2024, the reserves stood at $33.6 billion, up from $32.7 billion on June 3, 2024.
This increase is a positive sign for Nigeria’s economy, which has been struggling with currency fluctuations and declining foreign investment. The rise in reserves can be attributed to higher crude oil prices, improved export earnings, and the CBN’s currency management efforts. Over the past two weeks, reserves have grown by an average of $150 million per day.
This trend marks a shift from previous months when reserves fluctuated due to various economic factors. The increase in FX reserves is expected to benefit Nigeria’s economy by providing a buffer for meeting foreign exchange obligations, such as foreign debt payments and importing goods and services. It is also likely to boost investor confidence, which has been low in recent years.
The CBN has been working to stabilize the currency and maintain a stable exchange rate despite challenges from the COVID-19 pandemic and declining global oil prices. Measures such as a flexible exchange rate regime and restrictions on foreign exchange access for certain goods and services have been implemented.
Additionally, the CBN attributes the recent three-month decline in inflation rates to its effective monetary policy. The National Bureau of Statistics reported that the month-on-month inflation rate decreased to 2.14% in May, down from 2.29% in April and 3.02% in March, with food inflation also falling for the third consecutive month to 2.28% in May.
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