• ‘We can’t get firmer naira with dithering external reserves’
• Nigeria lags behind South Africa, Algeria in size, per capita
Nigeria may be leaning against the wind as its foreign exchange reserves fall below the threshold required by the Central Bank of Nigeria (CBN) Act of 2007, as data analysed by The Guardian suggests.
The reserves, which currently stand at $36.6 billion (N13.9 trillion), cannot fund a two-year import as required by the Act.
The Act, which charges the CBN with the responsibility of managing the country’s reserves, says, “the reserves level at the time can sustain 24 months of imports” in addition to general guidelines on its investment decision.
External reserves management is, according to the Act, guided by core objectives, such as providing “a level of confidence to markets that a country can meet its external obligations,” hedging the domestic currency, limiting “external vulnerability”…
Source: Guardian Newspaper