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Governor of Central Bank of Nigeria, Godwin Emefiele, says Nigeria's foreign exchange reserves have begun a "gradual recovery." He said the reserves stood at $31.89 billion as at July 7th, up from $29.1 billion at the end of June, but still below $37.3 billion a year ago.

Emefiele attributed the rise in the reserves to efforts by the bank to curb demand for foreign exchange and the efforts of the administration of President Muhammadu Buhari to plug all leakages in government revenue.

The central bank Governor made the disclosure in an address to the National Assembly on July 8th in Abuja during a briefing on the state of the economy.

Two weeks ago, the CBN announced restriction on the purchase of foreign exchange at its funded windows for the importation of some 41 consumer and intermediate products. Whereas some private sector leaders are protesting the forex policy which effectively placed a ban on the items, Emefiele now credits it for easing demand pressure on the reserves, leading to the modest appreciation.

However, since the ban, the naira has depreciated against the dollar by 5.4% at the BDC, raising the prevailing N221/$1 when the restriction was announced to N233/$1 at the end of last week. In a report released on the same day the CBN Governor gave the briefing to the NASS, Renaissance Capital said the CBN’s forex policy would have negative impact on consumption which is also negative for growth as prices of those items are likely to rise in the short term.