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HomeBusinessImportation: CBN Gov Allays Fear On External Reserve

Importation: CBN Gov Allays Fear On External Reserve

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The Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele has given the reassurance that Nigeria’s current external reserve is sufficient to cover 7 months of imports of goods and services.

Emefiele gave this assurance at the 55th Annual Bankers Dinner organized by the Chartered Institute of Bankers of Nigeria, CIBN in Lagos on Friday.

He pointed out that like other emerging market countries and countries that rely on earnings from oil exports, the decline in crude oil earnings, as well as the retreat by foreign portfolio investors, significantly affected the supply of foreign exchange into Nigeria.

Hear him “Our external reserves currently stand above $35bn and are sufficient to cover seven months of import of goods and services.

In order to adjust for the decrease in the supply of foreign exchange, he said the naira depreciated from N305/$ to N360/$, and subsequently to N380/$.’’

With the decline in our foreign exchange earnings and successive exchange rate adjustments, the CBN has continued to implement a demand management framework, which is designed to bolster the production of items that can be produced in Nigeria, and aid conservation of our external reserves.

Due to the unprecedented nature of the shock, we continued to favor a gradual liberalization of the foreign exchange market in order to smoothen exchange rate volatility and mitigate the impact which, rapid changes in the exchange rate could have on key macro-economic variables.

This we believe is in line with international best practices in countries where managed float arrangements are in operation,’’ he said.

Emefiele added that the measures being put in place by the authorities to improve the non-oil exports and other sources of foreign exchange had helped to prevent a significant decline in the country’s reserves.

Recall that Nigerian Foreign Reserves has been dwindling recently due to a fall in the global oil price which is Nigeria’s major forex earning and currently stands at $35b

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