The Governor of the Central Bank of Nigeria (CBN), Mr. Olayemi Cardoso, said that Nigeria’s savings in foreign money have gone up to $36.89 billion by July 16, 2024.
Mr. Cardoso told this to the Senate Committee on Banking, Insurance, and Other Financial Institutions in Abuja on a Friday. He explained that Nigeria’s smart money plans are helping the economy grow and stay strong.
He said that these savings can pay for more than 11 months of imports of both goods and services. If it’s just for goods, it can last for 14 months!
Cardoso also mentioned that it’s much more than the international rule of saving enough for 3 months. This shows Nigeria is ready to handle any money problems from outside the country.
He added that Nigeria’s banking world is strong, with 26 regular banks, 6 merchant banks, and 4 banks that don’t charge interest.
He said, “The difference between the official rate and the Bureau de Change (BDC) rate dropped a lot from N162.62 in January to N47.22 in June. This means prices are now fairer, and the market is working better, with fewer ways to cheat the system.
“The external reserves went up to 36.89 billion dollars by July 16, compared to 33.22 billion dollars at the end of December 2023. This rise mostly came from oil taxes and money from other things. In the first quarter of 2024, we had more money coming in than going out and better trade balances.”
Cardoso also said even though things are looking good, the CBN is still keeping a close watch to make sure the economy stays strong and keeps growing.
Efforts to Combat Economic Challenges
He promised the committee members that the CBN is ready to handle new problems.
To fight inflation (when prices go up), the CBN made several strong money rules. They raised the policy rate to 26.25%, increased the cash reserve ratio, and started using open market operations to manage liquidity. They also began focusing on targeting inflation.
In banking supervision, Cardoso said CBN took clear actions to make sure banks are safe and strong. They made changes in three banks, took away Heritage Bank’s license, raised the minimum capital required, and improved checks against money laundering and terrorist financing.
He stressed that CBN wants to give more money to Nigeria’s banks so they can support the economy better. The final aim is to build a stronger, more stable banking system, following global standards.
What You Should Know
Even though Governor Cardoso said Nigeria’s external reserves are $36.89 billion, a check on the CBN’s website showed the reserves were $35.77 billion on July 16 and rose to $35.93 billion on July 17, 2024.
Newslodge earlier reported that Nigeria’s foreign reserves passed $35 billion for the first time under President Bola Tinubu’s rule.