The Central Bank governor, Olayemi Cardoso, has stated that the recent depletion of the country’s foreign reserves was used to settle bills owing to international creditors, not to protect the naira, as widely reported.
The governor made the announcement at the ongoing International Monetary Fund Spring Meetings in Washington, D.C. on Wednesday.
Nigerians were concerned about the large drop in the country’s exchange reserves, which fell by nearly $2.16 billion in 29 days despite strong efforts to stabilise the naira.
Data on the movement of foreign reserves received from the CBN website revealed that as of April 15, 2024, FX reserves were $32.29 billion, a significant decrease from $34.45 billion on March 18, 2024.
The fall, the lowest in six years, signals a decisive conclusion to a period of continuous accrual, during which the reserves had a 43-day boom, accruing $1.28 billion between February 5 and March 18, 2024.
But speaking at the event, Cardoso said the depleting external reserve is due to debt repayments, other obligations, and depletion due to the ordinary course of business as seen in other countries.
He also stated that there were no intentions to defend the currency with the external reserves, as it was counterintuitive.
He said, ” I want to make this as clear as possible, it is not in our intention to defend the naira. and as much I have read in the recent few days, some opinions with respect to what is happening with our reserves and if the central bank is defending the naira.
“What we have seen with respect to the shift in our reserves is the shift that you would find in any country where for example, debts are due and certain payments need to be made and they’re done because that is also part of keeping your credibility intact.”