CBN Refrains From Defending Naira with Foreign Reserves -Cardoso

Nigeria is not defending the naira with its foreign reserves, according to CBN Governor Olayemi Cardoso.

He made the announcement on Wednesday while in Washington DC for the Spring Meetings of the International Monetary Fund and the World Bank.

Cardoso announced that 600 million dollars poured into Nigeria’s reserve account in the past two days.

Since last week, when it was trading at around N1,900/$, the naira has risen in value vs the dollar, increasing by more than 40% to around N1,000/$1. While the naira is making a comeback, Nigeria’s foreign reserves are falling, reaching a level not seen in more than six years on April 15th, at $32.29 billion.

What you’ve observed with regard to the change in our reserves is typical in every country’s reserves when, for instance, debts are due and specific payments must be paid; this is done to maintain credibility, Cardoso explained.

Between yesterday and today, approximately $600 million poured into the reserves account, which is a normal occurrence. We aim for a market where price discovery occurs naturally, with willing buyers and sellers.

“Defending the naira is clearly not our purpose, and the change in our reserves is completely unrelated to that.”