Debt servicing may have been responsible for the dipping of Nigeria’s foreign reserves from $34.45 billion to $32.61 billion within one month. Specifically, about $1.8 billion was spent from the foreign reserve within the period.
Speaking at the ongoing Springs meeting of the World Bank Group and International Monetary Fund (IMF) in Washington, United States yesterday, governor of the Central Bank of Nigeria (CBN), Yemi Cardoso, hinted that there were obligations that required settlement, which was done to maintain the integrity of Nigeria within the global financial space.
He explained: “In the last month, there were debts that were due and certain payments needed to be made. They were made because that is also part of keeping your credibility intact. And other times, money comes in.”
Dispelling any apprehension, Cardoso stressed that just as money is going out money is also coming into the foreign reserves, saying that the country recorded an inflow of about 600 million dollars.
“I think between yesterday and today, we had about $600 million that came into the reserves. But I would not let people get too excited about this.”
On the intervening of the apex bank in the forex market, Cardoso said such steps are needed to reduce hardships Nigerians that need forex to settle schools and medical expenses abroad.
“It is important to have access to funds to send kids abroad and do things which are important to health, etc. So it’s important not to keep them out of the mainstay. So yes, but in terms of intervention, frankly, that’s not my intention at all to intervene in the markets What you see concerning the shifts in our reserves is the shifts that you find in any country’s reserve situation,” he stated.
However, he was quick to explain that the CBN is determined to ensure the emergence of markets that operate on their own with willing buyers, and willing sellers and achieve price discovery.
His words: “That is where we are going to be. The shifts you have seen in our reserves have little or nothing to do with defending and that is certainly not our objective.”
Cardoso attributed the stability the current team has achieved to strong support from the political leadership.
“I think it is a combination of both, I think on the fiscal side and the leadership on the political leadership. I think there is a pretty strong understanding of what needs to be done to get Nigeria out of the difficult situation she is in,@ he explained.
Be held that doing things differently has helped the stability the foreign exchange market has witnessed in the last few weeks, saying, “I must say people are extremely impatient. Many people do not believe the path you are taking will get you there. But I think we were resolute enough. We were prepared to make the hard decisions quickly enough. That made a difference.”
