Nigeria's central bank has rejected a report by JP Morgan that showed the regulator's net external foreign exchange reserves fell to $3.7 billion in 2022 from $14 billion in 2021.

JP Morgan said in its latest report released this month on Africa's biggest economy that the central bank's foreign exchange reserves were "significantly lower than previously estimated." 

The report, titled 'Nigeria: Reform pause rather than fatigue, CBN’s financial accounts open a can of worms', was based on the Central Bank of Nigeria's (CBN) financial figures released mid-August, as well as the economic reforms being implemented by President Bola Tinubu. 

Hassan Mahmud, Director of the Monetary Policy Department at the central bank, said in an interview that the regulator disagreed with JP Morgan's analysis.“We also read the JP Morgan numbers in-house and we didn’t panic over that," he said on the MoneyLine show on Africa Independent Television (AIT), a privately-owned television broadcaster in Nigeria.

"That’s not the first time we see people, institutions reeling out numbers, they must have their intentions to do that, whether to rouse market sentiments or to mislead the public,” he said on the show.

The central bank has tried as much as possible to be transparent, Mahmud said. 

"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," Mahmud said in the television interview.

"Two, even if you have outstanding liabilities, you don’t mark the outstanding liabilities to market on a day and say this is your net balance,” the central bank official said.

Some of those reforms introduced by Tinubu include a forensic investigation at the central bank launched earlier this month, which led it to release its audited financial statements for the first time in seven years. 

The financial data covered the period between 2016 - 2022 and revealed that the central bank had received loans from US banks, including $7 billion from JP Morgan in 2021.  

(Editing by Seban Scaria seban.scaria@lseg.com)