How Nigeria's external reserves increased to $34 billion in three months

• Nigeria's external reserve has risen to a three-month high, surging to N$34 billion
• The development portends good news for the Nigerian currency the naira, which has depreciated to N1,500 per dollar
• Nigeria also witnessed a surge in diaspora remittances in the first five months of 2024

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment, and the economy for over a decade.

Nigeria’s external reserves hit a new high in June, rising to $34.07 billion, the highest since March 2024.

The information is according to data from the Central Bank of Nigeria’s (CBN) reserve position as of June 6, 2024.

Nigeria experiences a rise in external reserves, the highest in three months Credit: Picture Alliance/Contributor
Source: Getty Images

External reserve rises to a three-month high

A previous report by Legit.ng disclosed that the country’s external reserves surged to a three-month high, rising to $33.5 billion.

Nigeria’s reserves have continued to rise, hitting $34 billion for the first time since March 21, 2024, when it reached $34.2 billion. 

The external reserves have surged by a substantial $1.3 billion since June.

The development comes amid a surge in diaspora remittance, which rose to $365 million in five months.

Nigeria’s diaspora remittances surge

The Central Bank of Nigeria has reported a $172 million increase in direct remittance in one month, reports say.

Data from the CBN shows that remittances hit $138.56 million in January 2024, $39.14 million in February, $104.90 million in March, $193.31 million in April, and $365.44 million in May.

Nigeria witnesses a surge in diaspora remittance

Legit.ng reported that the data shows a 90% surge from April to May, hitting $365.44 million, and a 163% increase, showing significant growth in foreign currency inflows.

Experts say the development is positive for Nigeria’s economy amid rising debt profile and challenges of revenue diversification.

The increase shows the apex bank’s efforts to boost foreign currency remittance flows via formal channels.

CBN grants more licenses to IMTOs

The CBN announced that it has approved in principle 14 new International Money Transfer Operators to enhance remittances, an earlier report by Legit.ng says

The move aims to streamline remittance processes, remove challenges, and encourage the bank’s commitment to boosting official channels.

In January this year, the financial institutions' regulator removed the exchange rate cap earlier imposed by IMTOs to allow for more flexible currency quoting.

The adjustment was devised by revising operational guidelines and raising licensing fees for the operators, which shows CBN’s efforts to enhance the sector's operational mechanisms and financial requirements.

CBN governor sends message to Nigerians over naira depreciation

Legit.ng reported that the governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has expressed pleasure about the relative stability of the Naira in the past months.

The CBN boss disclosed in an interview with Bloomberg TV on Tuesday, June 25, 2024, that the naira volatility will not resurface again.

According to Cardoso, the apex bank's various interventions calmed the Naira’s volatility while stating that Nigeria’s Monetary Policy Committee (MPC) would do everything possible to stem inflation.

Source: Legit.ng