Nigeria’s Reserves Maintain Uninterrupted Rise, Hit Two-month High of $33.15bn

Nume Ekeghe

After a period of constant declines, Nigeria’s external reserves have reached a two-month high, climbing steadily to $33.15 billion.

This marks an uninterrupted rise since April 19th, when the reserves stood at $32.106 billion.

The upward trajectory, experts said, highlights a period of consistent growth for Nigeria’s financial reserves, reflecting positive economic management and possibly favourable market conditions.

Since mid-April, the reserves have shown a steady increase, culminating in the latest peak at $33.15 billion.

According to experts, this continuous growth suggests a robust financial outlook for the country, offering confidence to stakeholders and investors alike.

From April 19 to June 11, 2024, financial reserves have demonstrated a robust and consistent upward trend. Over these two months, the reserves have swelled from $32.11 billion to $33.16 billion, marking a substantial increase of approximately $1.05 billion.

Starting at $32.11 billion on April 19, reserves grew to $32.25 billion by April 30. This $147.66 million increase, although moderate, set a stable foundation for subsequent growth phases. This period reflected a daily average increment of $13.42 million.

However,May saw an impressive acceleration in reserve growth. Reserves climbed from $32.25 billion to $32.69 billion, adding $440.16 million over the month. The average daily increase jumped to $14.19 million, indicating a more aggressive upward trend likely driven by strategic financial manoeuvres and favourable market conditions.

The most remarkable growth occurred in the first 11 days of June, with reserves surging from $32.75 billion to $33.16 billion. This $411.10 million increase in just 11 days highlights an average daily growth rate of $37.37 million. The largest single-day increase was recorded on June 11, with reserves rising by $78.03 million from the previous day.

At the last Monetary Policy Committee (MPC) meeting, the Central Bank of Nigeria (CBN), Governor, Olayemi Cardoso mentioned that the MPC in managing and enhancing the reserves would focus on improving remittances through the official channels with the help of  

international Money Transfer Operators (IMTOs).

He said: “Members further observed the recent volatility in the foreign exchange market, attributing this to seasonal demand, a reflection of the interplay between demand and supply in a freely functioning market system. The Committee also noted the marginal increase in the external reserve balance between March and April 2024 and urged the Bank to sustain its focus on accretion to reserves. 

“The MPC commended the Bank for the recent approval of licenses of 14 international Money Transfer operators (IMTOs). This is expected to improve competition and lower the cost of transactions, thus attracting more remittances through formal channels.

“We have identified that this is a very critical element of the inflows coming into the country. It is estimated to represent about six per cent of our GDP. And so, we felt that it was important from the central bank perspective, to have a strategy to engage this sector.

“Now within that, the IMTOs play a very major role, and so for us, it was important for us to meet them. We had a number of private discussions, understanding what their problems were, and seeing how we could help them to ensure that they are more effective in the things they do. And of course, we shared the challenges that we saw in the future for the country and that everybody had a role to play. And I must say that they responded very positively.”

Cardoso also noted that there are two aspects that concern the committee, “one was the issue of the price, commissions, and the charges they are having to pay and of course, the issue of, at some point in time, the rates. And since the rates have converged, that has become less of an issue but they are encouraged to use official channels to advance the cause of the very laudable efforts that government is making to enhance the flows of foreign currency coming in.”

Cardoso also said that he is very interested in. “how we make progress on this and I’m certain that we will be successfully in doing it. Our target, is to double the remittance flow within a year. And as I said, we have started that process of engaging to ensure that it happens.”