Our $35bn external reserves enough to sustain 7 months imports

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Our $35bn external reserves enough to sustain 7 months imports — Emefiele

Femi Adeoya

November 28, 2020

Our $35bn external reserves enough to sustain 7 months imports — Emefiele

Nigeria’s Apex Bank Governor, Mr Godwin Emefiele, says the nation’s external reserves, which currently stand at $35billion, are sufficient to take care of 7 months of imports of goods and services.

The Central Bank of Nigeria, (CBN) Boss adds that decline in crude oil earnings as well as the retreat by foreign portfolio investors significantly affects the supply of foreign exchange into Nigeria.

He made the submission during the 55th Annual Bankers Dinner organised by the Chartered Institute of Bankers of Nigeria in Lagos on Friday.

Emefiele says that in order to adjust for the decrease in the supply of foreign exchange, the naira depreciated from N305/$ to N360/$, and subsequently to N380/$.

His words:

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

“The decline in crude oil earnings as well as the retreat by foreign portfolio investors significantly affects the supply of foreign exchange into Nigeria.

“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 favour a gradual liberalisation 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.”

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