“Naira Will Appreciate”: Tinubu Scores First as FX Reserves Exceed $35 Billion

• Data from the Central Bank of Nigeria (CBN) shows that Nigeria’s external reserves have reached a new high
• Information from CBN and tracked by Legit.ng shows that the country’s reserves have exceeded $35 billion
• This is the first time under President Bola Tinubu that Nigeria’s reserves will rise since March 2023

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

Nigeria’s external reserves have risen again, hitting $35.05 billion as of July 8, 2024.

Data from the Central Bank of Nigeria indicates that Nigeria’s reserves have increased since July 2024.

Reserves hit highest for first time under Tinubu

Analysis shows that the country’s reserves reached their highest level since May 30, 2023, at N35.09 billion, 14 days before the naira devaluation and foreign exchange unification of June 2023.

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Reports say this is the first time under President Bola Tinubu that the country’s reserves crossed that threshold.

According to analysts, the FX policies of the CBN may have boosted the FX reserve, including financial commitment from Afreximbank and the World Bank via loans. 

Nigeria’s reserves rose highest in June

According to reports, Nigeria’s external reserves were about $35.09 billion when Tinubu assumed office as Nigeria’s president.

Legit.ng earlier reported CBN data shows that Nigeria’s foreign exchange reserve has reached a new high of $34.7 billion after adding $110 million in 24 hours.

The reserve gained about $316 million since the beginning of July.

Factors leading to rise in FX reserves

The growth is due to several factors, including rising oil prices, improved diaspora remittances, and CBN’s plan to stabilize the local naira.

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Analysts see the rise in FX reserve as a positive development for Nigeria’s economy, providing a buffer against external shocks and supporting Nigeria’s ability to meet its financial obligations.

Naira to benefit from reserves gain

According to reports, Fitch Ratings recently upgraded Nigeria’s economic outlook to positive, citing significant reforms that have restored confidence and macroeconomic stability and enhanced policy coherence and credibility.

Financial analysts say the recent gain in the country’s reserves boosts the Nigerian currency, the naira, which has depreciated against the dollar.

According to them, the reserves act as firepower against naira depreciation, as the CBN periodically uses them to defend the local currency.

FG confirms successful debt servicing

Legit.ng reported that data from the budget office shows that the Nigerian government spent 64.5% of its 2023 revenue on debt servicing.

Actual debt service cost was about N7.66 trillion in 2023, an increase of 16.9% from the projected N6.56 trillion.

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Nigeria retains position as Africa’s largest oil producer, crude production rises in June

Actual debt service cost rose marginally in 2022 to N3.76 trillion from the budgeted N3.69 trillion.

Proofread by Kola Muhammed, journalist and copyeditor at Legit.ng

Source: Legit.ng