The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has stated that the country will not use its foreign reserves to defend the naira.
He made this statement on Wednesday in Washington, DC, where he is attending the International Monetary Fund-World Bank Spring Meetings.
Cardoso stated that $600 million was sent into Nigeria’s reserves account within the last two days.
In recent weeks, the naira has strengthened against the dollar by more than 40%, rising from over N1,900 to around N1,000 per dollar. However, while the naira is recovering, Nigeria’s foreign reserves are shrinking, falling to around $32.29 billion on April 15 – the lowest level in more than six years.
Cardoso said, “What you’ve seen with respect to the shift in our reserves is normal in any country’s reserves where for example, debt are due and certain payment needs to tbe made, they are made because that is also part of keeping your credibility.
“Other times money comes in, takes it up again, between yesterday and today, about $600m that came into the reserves account. We are looking towards a market that operats by itself, willing buyers, willing sellers and price discovery.
“The shift in our reserves has really little or nothing to do with defending naira and that is certainly not our objective.”