The Central Bank of Nigeria, CBN, has indicated that the country’s foreign exchange reserves at current level of about USD35 billion would cover seven months import needs of the economy.
This is contained in the apex bank’s 2020 economy review and 2021 outlook it has just released.
In the review and outlook the Bank explained that with the decline in the nation’s foreign exchange earnings and successive exchange rate adjustments, it was forced to implement a demand management framework which is designed to bolster the production of items that can be produced in Nigeria, and aid conservation of external reserves.
It stated: ‘‘Due to the unprecedented nature of the shock, we continued to favour a gradual liberalisation of the foreign exchange market in order to smoothen exchange rate volatility and mitigate the impact which rapid changes in the exchange rate could have on key macro-economic variables. This, we believe, is in line with international best practices in countries where managed float arrangements are in operation.