Nigeria’s reserves have increased steadily, reaching $34.14 billion on Friday after increasing by 4.06 percent from $32.74 billion on June 3, 2024, according to figures released by the Central Bank of Nigeria.
The most recent rounds of loans the Federal Government received from the World Bank have increased the nation’s reserves.
To support the nation’s energy distribution industry, the Federal Government obtained a $500 million loan from the World Bank, as revealed by the Bureau of Public Enterprises in May.
The World Bank also disclosed that the nation would get $2.25 billion in assistance to help stabilise its economy.
“This combined $2.25bn package provides immediate financial and technical support to Nigeria’s urgent efforts to stabilise the economy and scale up support to the poor and most economically at risk. It further supports Nigeria’s ambitious, multi-year effort to raise non-oil revenues and safeguard oil revenues to promote fiscal sustainability and provide sufficient resources to deliver quality public services.” The multilateral lender stated in a statement.
The local currency has, thereafter, depreciated by over 300 per cent in one year to 1,514.31/$ at the Nigerian Autonomous Foreign Exchange market on Friday.
According to a Bloomberg report on Friday, the naira emerged as the worst-performing currency in the world in the first half of 2024.
It noted that devaluation, insufficient dollar liquidity, and market volatility had hindered efforts by the Central Bank of Nigeria to strengthen the currency.
Besides the naira, Egypt’s pound and Ghana’s cedi were the world’s other worst performers in the first six months of the year.
“The naira’s performance is the worst among global currencies tracked by Bloomberg beside 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.
To increase the quantity of dollars in the nation and stabilise the value of the local currency, the central bank has implemented a number of measures.
International Money Transfer Operators now have access to the official window for selling foreign exchange, the apex bank stated last week.
The central bank stated in a circular that was signed by Dr. W.J. Kanya, the acting director of the Trade and Exchange Department, that the action would allow IMTOs to get naira liquidity through the official window, facilitating the prompt settlement of remittances from the diaspora.
The CBN barred banks and fintechs from providing services for foreign money transfers in January.
In an effort to increase liquidity in the retail segment of the foreign exchange market, it also started selling dollars to bureau de change operators again in February.
It stated that each qualified BDC operator will receive $20,000.
The BDCs were accused of dealing foreign exchange in sums above $5,000, which is against their licences and Nigeria’s FX laws, leading the CBN to suspend foreign exchange sales to them on July 27, 2021.
