CBN Warns of Risks to $50.45bn Foreign Reserves

The Central Bank of Nigeria (CBN) has issued a warning regarding potential threats to the country's foreign reserves, currently at $50.45 billion, the highest level in 13 years, due to oil price shocks and increased pre-election spending. CBN Governor Olayemi Cardoso addressed these concerns following the Monetary Policy Committee (MPC) meeting held on Tuesday in Abuja.

He highlighted that the fiscal deficit projected for 2027 and the impact of pre-election spending could destabilize the reserves. Cardoso assured that the CBN would continue to implement policies to maintain the reserves and avoid any policy reversals.

The reserves provide import cover for 9.68 months of goods and services. The CBN also reduced the benchmark interest rate by 50 basis points to 27 percent, aiming to support economic stability and encourage lending.

Cardoso noted that the CBN would provide a breakdown of the country's net external reserves and emphasized the importance of managing risks to sustain exchange rate stability.