We’re not depleting external reserve to defend, stabilise naira – CBN gov, Cardoso

• Many have attributed this decline to the aggressive push by the CBN to stabilise the naira amid dwindling economic fortunes

The Central Bank of Nigeria Governor, Yemi Cardoso, says the appreciation of the naira in recent weeks has nothing to do with the dwindling external reserve of the country.

The apex bank helmsman said this in reaction to claims and concerns that the CBN was dipping into the nation’s reserve to prop up the value of the naira.

Nigeria’s foreign exchange reserves have plummeted significantly in recent weeks, losing approximately $2.16 billion from a high of $34.45 billion logged on March 18, 2024, to a significant low of $32.29 billion by April 15, 2024. By the start of the month, the figure stood at $33.57 billion and continued to tank, reaching $33.43 billion by April

Many have attributed this decline to the aggressive push by the CBN to stabilise the naira amid dwindling economic fortunes.

Reacting, Cardoso said the apex bank is not defending the naira, explaining that the depletion of the nation’s external reserves was due to other inevitable factors.

Cardoso, who spoke on the sideline of the ongoing spring meeting of the International Monetary Fund/World Bank in Washington DC, said the depleting external reserve is mostly due to factors such as debt repayments, other obligations and depletion due to the ordinary course of business.

He also stated that there were no intentions to defend the currency with the external reserve, as it was counterproductive.

The apex bank was already implementing a willing buyer, willing seller policy.

He said: “What is important to us is that there is sufficient liquidity in the market which I’ve spoken about here today.

“$1 billion is out now, sometimes it is $600, $700 million as the case may be, and that will continue.

“I can understand that, especially at the outset, there had been little cases where the BDCs were needed to get that segment going. And, small amounts of money, relatively tiny amounts of money, have gone into that to catalyse that happening because it’s important that individuals have access to funds to send their kids abroad and do things which are important like health, etc.

“What you see with respect to the shifts in our reserves, is a shift that you will find in any country’s reserves situation, where for example, debts are due and certain payments need to be made: they are made because that is also part of keeping your credibility intact.”