Abuja\u2014The Governor of Central Bank of Nigeria, CBN, Olayemi Cardoso, said yesterday that the country\u2019s foreign reserves rose by 12.74 per cent to $39.12 billion as at October 11.<\/p>\n\n\n\n
He also said though inflation had shown \u201cgradual moderation,\u201d indicating that the monetary policy measures were \u201cbecoming effective,\u201d it remained a concern.<\/p>\n\n\n\n
Cardoso, who disclosed this when he appeared before the House of Representatives committee on banking regulation, yesterday, in Abuja, said the country\u2019s reserves stood at $34.70 billion at the end of June.<\/p>\n\n\n\n
He said the nation\u2019s foreign exchange reserves have \u201cgrown significantly\u201d with remittance flows currently representing 9.4 percent of total external reserves.<\/p>\n\n\n\n
\u201cThe reserves rose by 12.74 per cent to $39.12 billion as of October 11, 2024, from $34.70 billion at the end of June 2024,\u201d he said.<\/p>\n\n\n\n
The CBN governor said the foreign reserves were driven largely by foreign capital inflows, receipts from crude oil-related taxes and third-party.<\/p>\n\n\n\n
He said: \u201cIn Q2 2024, we maintained a current account surplus and saw remarkable improvements in our trade balance. The current external reserves position can finance over 12 months of import of goods and services or 15 months of goods only.<\/p>\n\n\n\n
\u201cThis is substantially higher than the prescribed international benchmark of 30 months, reflecting a robust buffer against external shocks.<\/p>\n\n\n\n
\u201cRegarding the foreign exchange market, the bank implemented various reforms including a unification strategy, which streamlined various exchange rate windows into a single model, adopting the willing buyer, willing Seller\u2019 approach to enhance FX liquidity and financial market stability.<\/p>\n\n\n\n
\u201cThis move was aimed at fostering transparency, reducing market distortions, and enhancing the efficiency of foreign exchange allocations.<\/p>\n\n\n\n
\u201cThis consolidation involved the implementation of new operational guidelines which included removing the international money transfer operator, IMTOs, quote cap.<\/p>\n\n\n\n
\u201cAdditionally, the bank resumed the sales of FX at the NAFEM and Bureau De Change, BDC, segments, bolstered by an improved supply from foreign portfolio investors, FPIs.<\/p>\n\n\n\n
\u201cIn the foreign exchange market, we have achieved increased transparency and improved overall supply. By allowing the foreign exchange rate to be determined by market demand and supply, the CBN has reduced arbitrage and speculative activities and eliminated the front-loading of FX demand.<\/p>\n\n\n\n
\u201cThese policy measures have effectively narrowed the exchange rate disparities between the NAFEM and BDC segments which have largely led to the convergence of FX rates.<\/p>\n\n\n\n
\u201cImproved transparency in the market has restored market confidence leading to increased capital inflows which enabled the CBN to clear existing FX backlogs.<\/p>\n\n\n\n
\u201cThe settlement of all legitimate backlogs of outstanding FX obligations by the bank has significantly improved Nigeria\u2019s credibility and ratings across the global financial market, helping to boost investor confidence, and enhanced liquidity in the foreign exchange market.<\/p>\n\n\n\n
Inflation remains a concern<\/p>\n\n\n\n
The latest data by the National Bureau of Statistics (NBS) indicate that the consumer price index (CPI), which measures the rate of change in prices of goods and services, rose to 32.7 percent in September.
The increase was the first in three months after the country\u2019s inflation rate declined twice in July and August.<\/p>\n\n\n\n
Cardoso said inflation has shown \u201cgradual moderation,\u201d indicating that the monetary policy measures were \u201cbecoming effective\u201d.<\/p>\n\n\n\n
He said: \u201cWe anticipate steady moderation of inflationary pressures in the last quarter of 2024, supported by our monetary policy measures and the federal government\u2019s recent initiatives, such as tax incentives on businesses in the economy.\u2019<\/p>\n\n\n\n
\u201cTo combat inflation, we have fully reverted to an orthodox monetary policy approach and implemented a comprehensive set of monetary policy measures.<\/p>\n\n\n\n
\u201cThese include raising the policy rate by 850 basis points to 27.25%, increasing cash reserve ratios and normalising open market operations as our primary liquidity management tool.<\/p>\n\n\n\n
\u201cIn addition, we have adopted an inflation-targeting (IT) monetary policy framework as part of the bank\u2019s enterprise strategy (2024-2028).\u201d<\/p>\n\n\n\n
\u201cThe IT framework, widely adopted across various global economies, is renowned for its effectiveness in combating persistent inflation.\u201d<\/p>\n\n\n\n
The CBN govenor said these measures were aimed at stabilising prices, optimising liquidity management, and engendering an effective monetary policy framework.<\/p>\n","protected":false},"excerpt":{"rendered":"
Abuja\u2014The Governor of Central Bank of Nigeria, CBN, Olayemi Cardoso, said yesterday that the country\u2019s foreign reserves rose by 12.74 per cent to $39.12 billion as at October 11. He<\/p>\n","protected":false},"author":1,"featured_media":12472,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_rishi_post_view_count":305},"categories":[31],"tags":[],"class_list":["post-12471","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","rishi-post"],"rishi__cb_customizer_meta":"","comments_count":0,"yoast_head":"\n