The Governor of the Central Bank of Nigeria (CBN), Mr Yemi Cardoso, has hinted that the apex bank plans to diversify the nation’s reserves base.
The central banker gave the signal at the opening of the Afreximbank Annual Meetings (AAM) in Abuja, on Wednesday, noting that foreign reserves diversification will help Nigeria reduce reliance on a single currency, usually the US Dollar.
So, this means, Nigeria will possibly hold a wider range of assets in their foreign exchange reserves.
Mr Cardoso didn’t provide details on the diversification but said it would be part of the reforms by the monetary authorities to better position the nation’s FX market in the interest of the economy.
Business Post reports that this move, if done, could see Nigeria increase holding other major currencies like the British Pounds, European Euro, Japanese Yen, and Chinese Yuan, as well as assets like gold and Special Drawing Rights (SDRs).
It could also help ease pressure on the Dollar, strengthening the foreign exchange market.
“As part of our ongoing policy reforms in the foreign exchange market to boost diaspora remittances and support Naira stability, we have introduced two financial products, namely the non-resident Nigerian ordinary account and the non-resident Nigerian investment account designated to serve Nigerians living abroad.
“This initiative is expected to provide a secure and efficient platform for managing funds investing in the Nigerian financial markets. This would harness the economic potential of Nigerians in the diaspora by boosting remittances and fostering investment in critical sectors of the economy.
“It is therefore imperative for initiatives such as this to be embraced to ensure that Africa and its diaspora continue to act in unison.
“And let me say also that for us, this particular initiative is certainly going to be a game changer, and people will now begin to understand a lot better how Nigeria is diversifying its revenue base and its reserve base, so please watch that space.”
The CBN boss said that African nations must take steps to shield the continent from global shocks.
He added that the CBN under his administration has focused on building confidence among stakeholders and partners.