Buoyed by sustained forex earnings, Nigeria’s external reserves hit 2-yr high at $31.2bn

Nigeria’s external reserve has risen to a two-year high of $31.2 billion even as the naira appreciated to N367.5 kobo at the Investors & Exporters (I&E) window.

Data from the Financial Market Dealers Quote (FMDQ) showed that the indicative exchange rate for the window, also known as, Nigeria Autonomous Foreign Exchange, NAFEX, dropped from N368.17 per dollar on Tuesday to N367.5 per dollar yesterday, translating to 67 kobo appreciation for the naira.

This is in contrast to the N1.73 depreciation suffered by the naira in the market in the first two days of the week. The naira however remained stable at N366 per dollar in the parallel market exchange rate.

Meanwhile data from the Central Bank of Nigeria (CBN) revealed that the reserve rose to $31.2 billion on Monday August 8 from $30.88 billion on August 1st. Since July 2015 when it rose to $31.46 billion, the external reserve declined steadily till October 2016.

Read also: FEC adopts MTEF, targets 7% growth rate by 2020

From $23.89 billion on October 19 2016, the reserve rose steadily to a new high of $30.98 billion on May 4 2017. Since then, the reserve fluctuated due to combination of increased dollar sales by CBN and decline in crude oil price.

This trend changed on July 7 2017, with the reserve recording steady rise, buoyed by improved foreign exchange inflow occasioned by increase in crude oil price, dollar inflow from foreign portfolio investors facilitated by the Investors and Exporters (I&E) window introduced in April, as well as reduction in dollar sale through CBN’s forex intervention.

According to the CBN, the reserve has risen by $890 million between July 7 and August 8 this year.

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