No need for alarm over Nigeria’s $44bn foreign reserves says central bank of nigeria

The apex bank in Nigeria which is the Central Bank of Nigeria (CBN) has put to rest worries of the country over the fluctuation in country’s reserves. ACentral bank of Nigeria (CBN) gave confidence with regard to its current level at over $44 billion, there is no need for worries. Speaking during CBN’s special day at the 13th Abuja International Trade Fair, the Acting Director, Corporate Communications, Isaac Okoroafor, said not only does the apex bank have the reserves to defend the Nigeria currency, but it is also enough to encourage small scale businesses to enhance their produce to make Nigeria economy better in the nearest future. He further stated that Nigeria’s present reserve level would support like seventeen to twenty months of importation assessing the similarities and differences in international standard, which stated for at least three months of import to remain at a comfortable level. He equally gave his world that the central bank of Nigeria will do everything possible to stabilize the financial situation of the country by providing for all Small and Medium Scale Enterprises (SMEs) which needs support to produce and grow the economy of the country. In His words he stated: “I also want to make it clear: it’s also on social media that our reserves dropped by $1.45 billion in one month. He made it clear that reserves is not always stable,it can go up and it can come down depending on the situation He gave reasons for the changes in external reserves, He said, ”You’ll recall that there was a time we survived on even $23.2 billion; the economy was running.” “Now, we are over $44 billion and the reason it is going down gently is because there’s a global squeeze on emerging markets: the Central Bank of the USA which is the FED had been raising interest rate, and you know international capital goes to where it earns better returns. “So, those who came into our economy to take advantage of the returns here seems to have found better returns in the US- and it’s not just in Nigeria- it’s happening to South Africa, Egypt, Pakistan, Iran, Argentina, Brazil, Turkey even China. ”China has lost over 1.3 percent of its currency, Argentina lost 134 per cent; Iran, India, some of them lost 18 percent, 17 percent- but here in Nigeria, our currency has gained 6 percent in the last one year. “You can see that the reversal of capital flows which is eating most economies and bringing about depreciation in their currency is not affecting us for two reasons- we’ve built enough buffers of reserves to be able to tackle situations like these. “Secondly, we are using the reserves to defend the value of our currency- so that also accounts for why it’s dropping. “Investors who brought in dollars- of course, we have a capital importation policy- if you bring your dollars, when you’re leaving, we give it to you. And so they brought their dollars, and they want to leave to the US, we give them because our word is our bond and so that has tended to make the reserves drop little. “At $44 billion, we still have between 17 and 18 months of import cover; meanwhile, the international standard is three months of import cover. “We are very comfortable- we have the reserves to defend the value of the naira, and we have the local support to also encourage our SMEs to go into production.” The CBN director also used the opportunity to advise the trade fair participants on how they could access the various interventions by the central bank. He said,” Unfortunately, we cannot do it (the financial interventions) directly, we’ve to do it through banks. “And that’s why we say again, people who engage in business should open an account with a bank, run that account and demonstrate that you are in business. “Once you keep your record and you show evidence that you are in business, banks will always give you loans. “But in a situation where people do not keep records, and there’s no difference between the money in their pocket ad their working capital, it’ll be difficult for banks to be able to do an examination and given you loan.” He advised participants to always keep record and open account with banks in Nigeria to benefit from CBN interventions