To minimise risk amid European debt crisis | By Eki Toju

The Central Bank of Nigeria (CBN) has disclosed that it may reduce its foreign reserves kept in Euros, to minimise risk amid the European debt crisis.

“The euro component at 7.8 percent needs to be monitored closely and, if necessary, further reduced to minimise the currency and exchange rate risks associated with euro holdings occasioned by the euro-zone debt crisis,” it said in a report published Friday.

The bank had $2.5 billion worth of Euros out of its total reserves of $32.6 billion as at the end of 2011, with the U.S. dollar accounting for 82 percent.

Nigeria started adding the Chinese Yuan in the fourth quarter of 2011, which reached $101 million equivalent, according to the report.

The Euro has come under pressure as the prospect of Greece leaving the euro region increased after parties opposed to the terms of the country’s second bailout by the European Union and the International Monetary Fund won most of the votes.

A fresh round of voting will be held June 17, after politicians failed to form a government.

The Euro touched its lowest level since July 2010 against the dollar, amid concerns that Spain’s regional governments may lose access to capital markets.

Nigeria’s foreign currency reserves rose 14 percent this year to $37.5 billion as of May 23, according to CBN data.

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