Nigeria: External Reserves Rise to 31-Month High At $32 Billion

Nigeria: External Reserves Rise to 31-Month High At $32 Billion

The Central Bank of Nigeria (CBN) hinted yesterday that the nation's external reserves have risen to a 31-month high of $32 billion as at September 22, 2017.

The external reserves continued to improve in 2017 on the heels of increase in global oil prices

Although the apex bank did not mention any reason for increased external reserves, the growth tend to come from increased global oil prices and inflow from international money transfer operations.

The price of Organization of Petroleum Exporting Countries (OPEC) basket of 14 crudes countries stood at $54.59 per barrel last week.

Hitting $32 billion, the highest in 2017, the external reserves have gained $6.3billion or 24 per cent from $25.8 billion it opened this year and it has gained 1.05 per cent as at September 21, 2017.

Between January and August, the foreign exchange buffer of CBN appreciated by estimated $5.97 billion from $25.8 billion it opened this year despite CBN's unrelenting intervention in the foreign exchange market.

Experts had said steady increase in global oil prices continued to impact on CBN's foreign exchange buffer and the nation's economy at large.

CBN spokesman, Mr. Isaac Okorafor, had noted that the increase in external reserves could be attributable to peace in the oil-rich Niger-Delta region of the country, which resulted in increased oil output and earnings.

The increase in external reserves have continued to impact on CBN's weekly intervention to manufacturing sector, Small and Medium Scale Enterprises (SMEs) sector and others that leveraged on the nation's economy out of recession data from the National Bureau of Statistics (NBS) has indicated.

The data from NBS showed that the economy expanded by 0.55 per cent in the second quarter (Q2) of 2017, driven mainly by the performance of the oil, Manufacturing, Agriculture and trade sectors.

Okorafor said with the sustained interventions, the apex bank has been able to push foreign exchange demand away from the parallel market into the formal regulated market.

OPEC and other producers, including Russia have promised to restrict output by 1.8 million barrel per day until March 2018 to help support prices and draw down inventories.

The CBN had disclosed that external reserves appreciated by $554.7 million or 1.8 per cent in July when it closed July at $30.8 billion from $30.29 billion it opened the month under review.

The $30.8 billion foreign reserve reordered by CBN was the highest since May 12, 2017.

The external reserves appreciated by $4.45 billion in first quarter (Q1) of 2017 amid CBN sustained pressure in bridging the gap between official foreign exchange and parallel market rates with the introduction of several foreign exchange windows.