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Nigeria’s external reserve is gradually climbing up to the $50 billion projection by the Central Bank of Nigeria (CBN) to be achieved before the end of 2018.
Africa’s largest economy reported a 0.27 percent increase in its foreign reserve from $47.49billion a month ago to $47.62 billion in May 30, central bank data showed last Friday.
Although the May figures is still below the CBN forecast for later the year, and if the set target is attained, it will be the highest level since at least 2009.
“Foreign exchange reserves have recovered significantly from a low of just over $23 billion in October 2016. Foreign exchange reserves will continue to grow. Following recent accretion, FX reserves may be about $50 billion sometime later this year,” Godwin Emefele, the CBN governor said in a statement.
Nigeria’s forex buffer stood at $30.36 billion, up 57 percent from a year ago, but is still far off a peak of $64 billion hit in August 2008.
The CBN Acting Director, Corporate Communications Department, Isaac Okorafor attributed the continued accretion of the country’s reserves to the Bank’s effort at vigorously discouraging unnecessary importation and reducing the nation’s import Bill; inflow from oil and non-oil exports, as well as the huge inflows through the investors and exporters window of the foreign exchange market, which he said had attracted over $33 billion since April 2017, when it was created.
Foreign exchange inflows through the Importers and Exporters Foreign Exchange Window (I&E ) between April 2017 and April 5, 2018, stood at $41.97 billion. The highest monthly foreign exchange inflows to Nigeria through the FX window was recorded in January 2018 at $6.04 billion, while the inflows in March 2018 at $5.15 billion was higher than the highest amount recorded in 2017 at $4.53 billion.
A senior official at the central bank told BusinessDay over the weekend that higher oil prices, increased foreign portfolio inflows and less CBN interventions in the foreign exchange market are the factors likely to spur reserve accretion.
Meanwhile, the Central Bank of Nigeria (CBN) in its usual intervention in the FX market injected $210 million into the forex market on 31 May and a week before that it intervened with $293million.
Although, the execution of $2.5 billion (N900 billion) currency swap agreement by CBN and the Peoples Bank of China (PBoC), was disclosed by Emefiele, to ease the pressure on the foreign reserve.
ENDURANCE OKAFOR
