Earlier this week, JP Morgan estimated that the net foreign exchange (FX) reserves of the CBN had dropped to $3.7 billion by the end of 2022, compared to $14 billion in 2021.

Clarifying the actual estimation of Nigeria's reserves, the Director of the Monetary Policy Department at CBN, Hassan Mahmud, appeared on Money Line Africa Independent Television on Wednesday.

He pointed out that fluctuations, liabilities, and encumbrances on the reserves were normal occurrences. Mahmud emphasized that the CBN had evaluated the JP Morgan figures internally without any panic. He expressed that such estimations might have intentions to influence market sentiments or mislead the public.

Mahmud explained, "But the central bank has tried as much as possible to be transparent. What I will say about those numbers is that it is just funny in the sense that number one, reserves like any account balance, is a flow; there are changes that go within it at any particular time."

When asked if the public should disregard JP Morgan's estimate, Mahmud said, "It is a ridicule for us (CBN) to come to the public domain, whether the CBN governor or deputy governor to speak on issues by JP Morgan. I don’t even know who said it in JP Morgan."

Mahmud emphasized that the CBN held about 80 percent of funds in reserves, primarily to support the local currency during periods of volatility and to enhance foreign investors' confidence. He further stated that the CBN's reserves, including IMF facilities, SDRs, JP Morgan's numbers, and forwards, are accounted for transparently.

The CBN official clarified that while the figures might not be precise to the last decimal point, the central bank's reserves stood at $33 billion. He reiterated the CBN's commitment to maintaining transparency and providing accurate information about the nation's financial state.