President Bola Ahmed Tinubu’s tenure is kicking off with the country’s reserves at its lowest level in 20 months.
According to data obtained from the Central Bank of Nigeria as at Thursday, 25 May 2023, Nigeria’s foreign reserves stood at $35.15 billion.
The last time Nigeria’s foreign reserves were at this level was on 13 September 2021, 20 months and one week ago, when the reserves were at $35.10 billion.
However, it is important to note that among the various key economic metrics used to measure the performance of the Buhari administration, foreign reserves was one of those that performed well.
When Buhari assumed office in 2015, Nigeria’s foreign reserves were at $29.59 billion on May 28.
This indicates that during his 8-year tenure, Nigeria’s foreign reserves grew by 18.79 percent.
Monthly breakdown of Nigeria’s foreign reserves in 2023
News Direct further analysis of CBNforeign reserves data shows that from January 1, 2023, to May 25, 2023, $1.9 billion have been pulled out from the foreign reserves.
April 28: $35.25 billion
March 31: $35.49 billion
February 27: $36.67 billion
January 31: $36.99 billion
What is Foreign Exchange Reserves, and why it is important?
Foreign exchange reserves are assets denominated in other currencies (i.e dollars). These reserves are utilized to back up liabilities and influence monetary policy.
Foreign reserves serve as a buffer to support the stability of the Nigerian currency in the international foreign exchange market.
When the CBN intervenes in the foreign exchange market, it uses its foreign reserves to influence the supply and demand of the Nigerian naira.
The foreign reserves also serve as a means to protect against external shocks and ensure the country’s ability to meet its international obligations.