The report in circulation that the Central Bank of Nigeria, CBN, has been deploying the country’s foreign reserves to shore up the naira’s value has excited the reaction of the apex bank.
The claim arising from the exchange rate of the naira against the dollar in favour of the former in recent times was attributed to alleged use of Nigeria’s foreign exchange to induce the situation in some quarters
It also happend that the country’s foreign reserves dipped 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.
CBN governor, Olayemi Cardoso, used the occasion of the ongoing Spring Meetings of the International Monetary Fund (IMF)/World Bank in Washington DC where he was in attendance to explain the cause of the depletion.
Cardoso denied the naira defence, saying it’s at variance with the bank’s policy: “Defending the naira goes against our core philosophy and policy. We want a naira that performs based on market forces, as long as we have a vibrant foreign exchange market.”
He went on to put the dip in foreign reserves down to government meeting its commitment.
According to him, “The recent changes in our reserves are not for defending the naira, they are for settling obligations that were due. After all, that’s the primary purpose of holding foreign reserves.”
