CBN Spent $1.3bn To Stabilise Nigeria’s Currency

Nigeria’s foreign reserves fell short of expected growth in April after the Central Bank of Nigeria spent $1.3bn from the reserves to defend the naira.

Despite crude oil rebound, the reserves only rose by 0.25 per cent, which represents $88.7m in the month of April 2021.

THE WHISTLER observed that the reserves closed N34.9bn in April from the N34.82bn recorded on March 31, 2021.

External reserves had risen to $36.46bn at end-February 2021, compared with $34.94bn at end-January 2021.

Monetary Policy Committee Member, Adeola Festus Adenikinju revealed, “CBN has spent over $1.3bn to defend the naira between January and February 2021.”

CBN had in March “noted with satisfaction the improvement in the level of external reserves” adding it was reflective of upsurge in crude oil prices.

In April, oil prices surged to $64.61 per dollar, up from the $62.28 recorded in February and slightly lower than the $65.41 in March.

Contrary to expectations, the reserves dropped to N34.82bn in March and N34.91bn in April.

The apex bank had recently introduced policies to improve Diaspora remittances after Covid-19 induced crude oil price crash in 2020.

The CBN late last year directed banks to pay beneficiaries of Diaspora remittances in either dollar or currency of choice.

It also provided incentives for the remittance of dollar with N4 to every dollar repatriated.

This was part of the moves to move away from over reliance on crude oil proceeds and improve the value of the Naira.

In 2020 the apex bank adjusted the official rates of the naira from N307 held in March 2020 to N360 and N379 per dollar.

On Monday, the currency traded N485 per dollar at the parallel market.