Nigeria’s foreign reserves inch upward, cross $35bn threshold

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Nigeria’s foreign reserves have climbed above the $35 billion mark for the first time since early in the current administration, according to data released by the Central Bank of Nigeria (CBN) on Monday. This rise comes after a period of decline that coincided with a turbulent year for the Nigerian economy.

The reserves currently stand at $35.05 billion, a level last seen on June 2nd, 2023. This increase is a positive sign for the country’s financial health, as foreign reserves serve as a buffer against external shocks and are used to fund imports and support the stability of the naira, Nigeria’s currency.

However, it’s important to note the context of this rise. The naira has faced significant depreciation since the CBN implemented a unified foreign exchange market in June. Bloomberg reports that the naira has lost roughly 70% of its value against the US dollar since this reform.

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While the foreign reserves reaching $35 billion is a cause for cautious optimism, it’s crucial to monitor the exchange rate situation. A stronger foreign reserve position can help stabilize the naira, but the recent depreciation cannot be ignored.

Looking ahead, it will be essential to see if this rise in reserves is a sustainable trend. The CBN’s management of the foreign exchange market and its impact on the naira’s value will also be key factors to watch in the coming months.

Tags: foreign reserves, CBN, Olayemi Cardoso, Nigeria, Naira, Bola Tinubu, Central Bank of Nigeria,