In the light of popular perception regarding. the virtue of large reserves, it may seem incredible for anyone to suggest that the process of accumulating reserves by the Central Bank of Nigeria is in reality, actually the primary reason for a low value naira.
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Let us begin to expound this observation with the recognition that out of total current national reserves of about $50bn, the excess crude account apparently holds about $9bn, while about $1bn is domiciled in the sovereign wealth account; the balance of about $40bn comprise what CBN proudly claims as its own reserves, which do not technically belong to the federation account, and cannot therefore be appropriated.
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Undoubtedly, such unfettered largesse would pose the grave danger of moral hazards; nonetheless, the $40bn cache represents the answer for those Nigerians who wonder how CBN funded a host of social welfare interventions in the recent past.