Amidst concerns over the continuous drop in the volume of the nation’s foreign reserves, the Central Bank of Nigeria (CBN) said yesterday that there is no need to panic.
Nigeria currently has a foreign reserves gross rate of about $44.3 billion, which still safely leaves the country on the green side.
At $44 billion, CBN still has between 17 and 20 months of import cover, while the international standard is at least three months import cover. Speaking at the 2018 Abuja International Trade Fair with the theme: “Enhancing SMEs in Agribusiness through Innovative Technology”, CBN’s director of corporate communications, Isaac Okorafor, insisted that the apex bank has solid reserves base to defend the Naira.
“Oil price is also moving in the direction we desire. With all these combinations, we are very, very comfortable. We have the reserves to defend the naira. And we have the total support to encourage the SMEs to go into production”, Okoroafor noted.
The CBN Spokesman blamed the drop in foreign reserves on the recent reversal of the capital flows by portfolio investors who, he said, moved to countries like the United States of America where there was a recent rise in interest rate.
He said the Nigerian economy was not affected because the country built enough buffer of reserves to be able to tackle situations like this.
“The second one is that we are using the reserves to defend the value of our currency. It only made it drop a little. You would recall that we survived on even $23.6 billion. The economy was running.