Nigeria’s Central bank says the country’s external reserve has surged to a 33 month high, reaching $40 billion. The surge, according to the CBN Governor Yemi Cardoso, is an indication that the fiscal and monetary policies are yielding results.
Also, Cardoso noted that while inflation remains high, the figure has started declining due to some the policies implemented in the last one year. Cardoso noted that raising the lending rate to 27.25 percent and increasing the cash reserve ratio to 50% have yielded positive results.
In addition, Cardoso highlighted the achievements in the foreign exchange market, citing the abolition of multiple exchange rate windows which had created arbitrage while also discouraging foreign investments. The CBN believes it has enhanced regulations and minimised disruptions in the FX market through a new guideline for Bureau de Change operators in the country.
The CBN is also looking to increase foreign inflows, setting a monthly target of $1 billion to bolster the foreign reserve further and enhance economic stability.
As Nigeria continues to battle inflation and declining purchasing power, the CBN is optimistic that its monetary and fiscal policies are yielding the anticipated result. Also, it is expecting a further increase in diaspora remittances through the recent US dollar bond auction and other initiatives.
