Nigeria Forex Reserves Add Quick $50m in 2 Days

The country’s foreign reserves which have been on decline for the past two months reversed the trend with $47 million increase in just in two days.

The reserves were at $37.80 billion on March 31 but rose to $37.83 billion and further increased to $37.85 billion on April 3.

The reserves had received serious battering after the suspension of Sanusi Lamido Sanusi, governor of the Central Bank of Nigeria ( CBN) on February 20 as foreign investors scurried for exit.

Foreign-exchange reserves (also called forex reserves or FX reserves) are assets held by central banks and monetary authorities, usually in different reserve currencies, mostly the United States dollar, and to a lesser extent the Euro, the Pound sterling, and the Japanese yen, and used to back its liabilities, e.g., the local currency issued, and the various bank reserves deposited with the central bank, by the government or financial institutions.

The reserves were at $42.77 billion on February 3, and dropped to $39.72 billion on March 3, losing $3 billion in one month. Analysts said the reserves declined as imports of petroleum and foods soared.

The level of Nigeria’s external reserves had fallen to $43.63 billion as at December 30th last year. This is the lowest level since November, 2012 and a decline of 10.7 per cent from 2013’s Year to Date peak of $48.86 billion.

The continuous use of the external buffers to support the value of the naira and declining oil receipts are among the contributing factors to the depletion.

With over 50 per cent of foreign exchange utilised for the importation of fuel and food, the CBN said policy should focus on a comprehensive backward integration production strategy, while fast-tracking the repair of existing refineries.

As at October 10, the reserves were at $45.3 billion, as against $46 billion in September 19, and $47 billion in August 19, data from the CBN website showed.

Further findings showed that reserves were at $47.7 billion on July 1, and dropped to $47 billion on July 15. Reserves also entered August 1 at $47 billion. The foreign currency reserves had five years ago, in August 2008, peaked at $68 billion before the global financial crises impacted negatively on it. uf