In less than 7 days, Nigerian foreign reserves rose by almost $300m from $25.084bn on December 16, 2016 to $25.361 on December 22, 2016 - CBN
Nigerian Foreign Reserve Up To 25.4bn
Nigeria’s foreign reserves have hit $25.4bn, according to the Central Bank of Nigeria.
In less than 7 days, Nigerian foreign reserves rose by almost $300m from $25.084bn on December 16, 2016 to $25.361 on December 22, 2016, the CBN data revealed.
This means that the foreign exchange reserves had risen to nearly a four-month high.
The last time this happened close to this was on September 2 when it had the balance of $24.361bn.
Nigeria’s reserves had recorded $23.89bn low on October 19 dropping by 15.9 per cent from last year when they closed at $29.7bn.
By November ending, the reserve was at $24.77bn, up from $23.95bn on October 31.
The CBN figures showed that the foreign exchange reserves reduced to $24.92bn on September 14 from $25.11bn on September 9.
Financial and economic experts are unsure if the tiny rise in the external reserves is sustainable due to a falling Naira and acute shortage of dollar in the foreign exchange markets and the economy.
Experts speculate on Nigerian Foreign Reserve
“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 rise in Nigerian foreign reserves is not due to supply over demand. It happens when there is a slowdown in the allocation of FX,” the Chief Executive Officer, Cowry Asset Management Limited, Mr. Johnson Chukwu said.
Ayodeji Ebo, senior associate with Afrinvest, a research and investment firm, said the gradual rise may only be sustainable if the oil price maintained its current level and there was a continuous ramp up in oil production.
The CBN on June 20 lifted a 16-month-old currency peg and auctioned about $4bn on the spot and futures market to remove a backlog of dollar demand and help boost inter-bank market trading.
Nigerian foreign reserves dropped to $25.97bn from $26bn on August 4, 2016 on August 5 due to CBN stepping up dollar sales to boost liquidity at the inter-bank market and support the ailing naira.
The Naira touched an all-time low of 365.25 per dollar on August 18 at the official market but has consistently closed around 305.5 in past weeks.