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Nigeria’s FX reserves dip by over $2bn in one month, lowest in 6 years

The Central Bank of Nigeria has released a strong affirmation of the security of cash within Nigerian banks, highlighting the country's banking sector's soundness. Amid widespread unconfirmed rumours, not originating with the CBN, raising concerns about the health of Nigerian banks, the central bank of Nigeria asked the people not to panic and to continue with their usual banking activity. To ease people's anxieties and comfort them, the CBN emphasized its readiness and capability to carry out its stated role of maintaining a stable financial system in Nigeria. This statement by the CBN responds to the concern caused by unverified information and seeks to reassure the public about the safety and stability of the country's banking industry. "The Central Bank of Nigeria has noticed reports, in certain media outlets, about a recommendation for the Federal Government to take over some CBN-supervised financial institutions," said the apex bank's acting Director, Corporate Communications, Hakama Sidi-Ali, in a statement issued on Wednesday. "To avoid any doubt, Nigerian banks are still safe and sound. The CBN advises the public to go about their daily lives without getting disturbed by reports regarding the health of Nigerian banks that have not come from the CBN. "The CBN is fully equipped to carry out its statutory duty of ensuring the stability of Nigeria's financial system. "We assure the general public and depositors that their funds are safe in Nigerian financial institutions. "Bank customers are therefore advised to proceed with their banking transactions as usual, as there is no cause for concern." This statement follows a report by the CBN's special investigator, Jim Obazee, alleging that Godwin Emefiele, the former governor of the federal bank, used proxies to establish two financial institutions. According to the report, Emefiele utilised proxies to acquire Union Bank of Nigeria for Titan Trust Bank Limited and Keystone Bank without providing any proof of payment. As a result, it recommended that the Federal Government reverse the sale and take over the banks.
    By Sunday Michael Ogwu

Nigeria’s foreign exchange (FX) reserve has plunged by approximately $2.16 billion in 29 days, amidst the Central Bank of Nigeria’s (CBN) robust efforts to stabilise the naira.

Current figures from the CBN, as of April 15, 2024, reveal that the FX reserves are now at $32.29 billion, a decline from $34.45 billion recorded on March 18, 2024. 

The reserves have exhibited a consistent downward trajectory, shedding approximately $2.16 billion from a high of $34.45 billion logged on March 18, 2024, to a significant low of $32.29 billion by April 15, 2024.

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By the start of the month, the figure stood at $33.57 billion and continued to wane, reaching $33.43 billion by April 4. The depletion of reserves pressed on, with the figures at $33.04 billion on April 8, $32.61 billion on April 12, and $32.29 billion on April 15. 

The reserve had previously shed about $1.02 billion in just 18 days, attributed to the CBN’s vigorous interventions in the FX market to support the naira. 

The foreign exchange reserves plummeted to the lowest level since September 25, 2017, when the reserves were $32.28 billion. 

This diminishing pattern underscores the prevailing financial strain as the apex bank strives to maintain the naira’s stability amid challenging economic conditions. 

 

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