LAGOS, Nigeria (VOICE OF NAIJA) – Nigeria’s foreign reserves have reached $34.14 billion as of Friday, marking a 4.06% increase from $32.74 billion recorded on June 3, 2024, according to data from the Central Bank of Nigeria (CBN).
This growth is largely attributed to recent World Bank loans acquired by the Federal Government.
In May, the Bureau of Public Enterprises announced a $500 million World Bank loan secured to strengthen Nigeria’s electricity distribution sector.
Additionally, the World Bank pledged $2.25 billion to support Nigeria’s economic stabilization efforts and enhance support for vulnerable populations.
“This combined $2.25bn package provides immediate financial and technical support to Nigeria’s urgent efforts to stabilise the economy and scale up support to the poor and most economically at risk. It further supports Nigeria’s ambitious, multi-year effort to raise non-oil revenues and safeguard oil revenues to promote fiscal sustainability and provide sufficient resources to deliver quality public services.” The multilateral lender stated in a statement.
As a result, Nigeria’s external reserves have surged by over $1 billion within a month.
Last year, the country grappled with dollar shortages, prompting the CBN to float the naira to attract foreign exchange inflows.
However, the naira has depreciated significantly by over 300 per cent, reaching 1,514.31 per dollar on Friday at the Nigerian Autonomous Foreign Exchange market.
According to Bloomberg, the naira was identified as the worst-performing currency globally in the first half of 2024.
The Central Bank of Nigeria’s efforts to strengthen the currency have been hindered by devaluation, inadequate dollar liquidity, and market volatility.
In addition to the naira, Egypt’s pound and Ghana’s cedi were among the worst-performing currencies globally in the first half of the year.
“The naira’s performance is the worst among global currencies tracked by Bloomberg besides that of the pound in Lebanon, which is undergoing an economic crisis and witnessing dollarisation,” the report noted.
Meanwhile, the CBN Governor, Olayemi Cardoso, stated that the apex bank was “relatively pleased” with the progress made in stabilising the local currency.
“I do believe that we have more or less seen the worst in terms of volatility,” Cardoso told Bloomberg TV.
“The losing streak is the longest since July 2017 and takes the decline since the start of the year to 40 per cent.
The central bank has implemented various measures to enhance dollar supply and stabilize the local currency.
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Recently, the apex bank announced that International Money Transfer Operators would now be able to access the official window to sell forex.
In a circular signed by the acting Director of the Trade and Exchange Department, Dr W.J Kanya, the apex bank stated that this measure would allow International Money Transfer Operators (IMTOs) to access naira liquidity at the official window, facilitating prompt settlement of diaspora remittances.
Earlier this year, in January, the CBN halted international money transfer services provided by banks and fintech companies.
Also, in February, it resumed the sales of dollars to bureau de change operators to boost liquidity in the retail end of the forex market.
It noted that $20,000 would be allocated to each eligible BDC operator.
On July 27, 2021, the CBN suspended foreign exchange sales to BDCs, citing violations of their licenses and Nigeria’s FX regulations due to trading FX amounts exceeding $5,000