External reserves ‘surge to $34b’

Joseph Nnanna, deputy governor, financial system stability, Central Bank of Nigeria (CBN), says external reserves have hit $34 billion from $33.6 billion.

Nanna said the figure has been rising quickly, based on a 30-day moving average, since hitting the $32 billion mark on September 18.

At an event organised by the Chartered Institute of Bankers of Nigeria (CIBN), Nnanna said the exchange rate stability achieved so far by the apex bank will remain.

“We have achieved stability and the stability is here to stay,” he said.

Speaking about currency volatility and its effect on the economic cover the reserves provide, Nnanna said if managed properly, inflows could cater appropriately for government spending.

“The sustainability is already evident, the reserves are growing,” he said.

“When we had volatility, the reserves were as low as $20bn.

“But let me say one thing: Nigeria can make do with a reserve level of $20bn but it is the press who gives the impression that if the reserves fall below $30bn, then there is a problem.

“All we need to manage the economy and manage it properly is reserves that can cover at least three months of import.

“And in fact, as it is, $10bn or $12bn can give us reserve coverage of four months.”

Pointing to the impressive performance of the investors and exporter’s foreign exchange window (I&E window), Nnanna said exchange rate convergence was the way forward.

“Our exchange rate is convergent; we are getting southward,” he said.

“For us at the CBN, we believe that organic convergence is the way to go.”