Nigeria’s External Reserves Rise To $25.4bn

By Ikenga Chronicles December 27, 2016

The Central Bank Of Nigeria has in a data on its website disclosed that the country’s foreign exchange reserves have risen further to $25.4bn. The data revealed that the reserves  improved with almost $300m from $25.084bn recorded on December 16, 2016 to $25.361 on December 22, 2016.

It would be recalled that on October 19, the nation’s reserve recorded a $23.89bn low with the reserve dropping by 15.9 per cent from last year when they closed at $29.7bn.

But the latest development shows that the foreign exchange reserves have risen to almost a four-month high after its latest rising in September 2 when it had the balance of $24.361bn.

At the end of November, the reserves stood at $24.77bn, up from $23.95bn on October 31 while the CBN data showed that the foreign exchange reserves declined to $24.92bn on September 14 from $25.11bn on September 9.

In his reaction, the Chief Executive Officer, Cowry Asset Management Limited, Mr. Johnson Chukwu, said “We are not sure the extent this can go. Currently, the FX market is not a free-float one where the interplay of demand and supply determines price and volume. The uptick is not as a result of supply over demand. It happens when there is a slowdown in the allocation of FX”

Another senior associate in investment banking at Afrinvest, a research and investment firm, Mr. Ayodeji Ebo, said the gradual increase might only be sustainable if the oil price maintained its current level and there was a continuous ramp up in oil production.

However, the CBN had on June 20 lifted its 16-month-old currency peg and auctioned about $4bn on the spot and instructed futures market to clear a backlog of dollar demand to help boost interbank market trading.

 

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