The Central Bank of Nigeria (CBN) has said external reserves gained $58 million to $30.23 billion as at March 14, 2017. The latest data by CBN disclosed that nation’s foreign reserve has been hovering between $29 billion and $30 billion in March.
This is just as the gap between the interbank market and parallel market end of the foreign exchange market continued to widen. Despite the recent decline in global oil prices, the external reserves continued to increase in March from $29.6 billion it opened in to $30.23 billion as at March 14, 2017.
Organization of Petroleum Exporting Countries (OPEC) reference basket price moderated lower by 8.9 per cent to $48.63 per barrel as at March 14, 2017 from $53.40 it opened this month.
The apex banking regulatory body yet to provide reasons for the recent rise in foreign reserves as experts attributed the recent rise to steady increase in global oil prices, among other factors. Foreign Exchange Reserves has gained $439 million in 2017 from $25.84 billion it opened in 2017 to $30.23 billion it closed on yesterday.
The foreign exchange had fallen by $3.2 billion or 10 per cent in 2016 from $29 billion to $25.8 billion. A group of experts at GTI Securities Limited, a Lagos based securities firm said, “As indicated in earlier Exchange Rate analysis, the external reserves was weak all through 2016 and greatly limited the CBN’s ability to support price stability.
“The weak oil receipts in the course of the year resulted in depletion of the reserves account which eventually hit a 15-year low of $23.89billion in October 19th. The account has since recorded marginal accretion as inflow from International Money Transfer Operations (IMTO) on trade proceeds has helped to boost upside.
“The marginal increase in oil production after the government and Niger-Delta Avengers entered into truce equally contributed to recent rally on the reserves.”
They explained that the output cut agreement reached by OPEC members in late year November and the OPEC and non-OPEC members deal in December is expected to provide boost to the foreign reserves going forward and thereby supporting the fiscal and monetary policies makers in steering the economy out of current recession.