CBN boosts FX market as external reserves climb to $33.1bn

by | October 16, 2017 11:12 am

The Nigeria’s external reserves have risen to $33.1 billion as at October 12, 2017 according to data from the Central Bank of Nigeria (CBN).


The pick-up in oil production has been an obvious positive for accumulation in foreign exchange reserves, analysts said.


The price of Brent crude oil rose to $57.12 as at yesterday October 13, 2017. Crude oil account for more than 90 percent  of Nigeria’s foreign exchange earnings.


FBNQuest, analysts had said gross external reserves is heading towards the $40 billion mark, the level they last touched in February 2014, before the most recent slide in the crude oil price.


Godwin Emefiele disclosed at the last Monetary Policy Committee (MPC) meeting that external reserves position grew to US$32.9 billion at close of business on September 25, 2017.


“If the price of oil remains stable in the 50s then we are likely to hit $40 billion sooner rather than later,” Taiwo Oyedele, head of tax and regulatory services, PWC, said.


According to Oyedele, a high reserve balance will help improve Nigeria’s sovereign credit rating and consequently reduce cost of borrowing cost for government and private sector.


Players in the retail segment of the Nigerian inter-bank foreign exchange market received a $306.3 million boost from the Central Bank of Nigeria (CBN) on Friday, October 13, 2017, following bids received from forex dealers by the apex Bank.


Information obtained from the CBN on Friday indicates that the deals in the retail window represent requests from the various sectors in the Secondary Market Intervention Sales (SMIS), thereby providing a boost to the respective sectors.


Isaac Okorafor, the Acting Director, Corporate Communications Department, while responding to media enquiries, revealed that the apex Bank would continue to increase liquidity based on genuine demands in the market to enhance forex stability.


He reminded Nigerians that the CBN has kept faith with its resolve to sustain liquidity in the forex market and that the Bank had ensured that pressures on the market were removed by its continuous interventions.


Meanwhile, the naira, on Friday, October 13, 2017, exchanged at an average of N364/$1 in the Bureau de Change segment (BDCs) across major trading points in Lagos, Abuja, Port-Harcourt and Kano.

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