The nation is not defending the naira with its foreign reserves, according to Olayemi Cardoso, Governor of the Central Bank of Nigeria (CBN).
He stated this on Wednesday in Washington, DC, where he is attending the International Monetary Fund-World Bank Spring Meetings.
Cardoso reported that in the previous two days, $600 million was added to Nigeria’s reserves.
In recent weeks, the value of the naira has increased in relation to the US dollar, rising by over 40%, from roughly N1,900/$ to roughly N1,000/$1. But while the naira rebound, Nigeria’s foreign reserves are dwindling, dropping to about $32.29 billion on April 15 — the lowest level in over six years.
Cardoso said, “What you’ve seen with respect to the shift in our reserves is normal in any country’s reserves where for example, debt is due and certain payments need to be made because that is also part of keeping your credibility.
“Other times money comes in, takes it up again, Between yesterday and today, about $600 million came into the reserves account. We are looking towards a market that operates by itself, willing buyers, willing sellers and price discovery.
“The shift in our reserves has really little or nothing to do with defending naira and that is certainly not our objective.”
