External reserves gain $8bn in 10 months – CBN

*As NAFEX boost investors’ confidence with $8.96bn

The nation’s external reserves have recorded a whopping $8billion in just 10 months of 2017, data obtained from the official website of the Central Bank of Nigeria (CBN) has showed.

This is just as the Nigerian Autonomous Foreign Exchange (NAFEX) widow has boosted investors’ confidence with total traded transactions of $8.96bn between September and October, 2017.

The new figure showed that between January and October 2017, the foreign reserves, under the watchful eyes of the Central Bank of Nigeria(CBN), increased by 30.9 per cent this year, with an opening figure $25.84bn before closing at $33.83bn on October 31, 2017.

It is however worthy of note that in recent times, there has being steady increases in global oil prices and increased activity in the Investor and Exporter FX window.

For instance, the price of Organisation of Exporting Countries’ (OPEC’s) basket of 14 crude countries gained 9.9 per cent to $58.57 per barrel as at October 31, 2017 from 53.3bp/d it started trading early this year.

Global Oil prices continued to rally around $60 per barrel extended to new heights last Wednesday, with Brent crude climbing to a level last seen in mid-2015, stoking hopes in the industry that the market has finally turned a corner following a three-year slump.

An oil price recovery has been under way since June, as crude demand finally starts to outpace supply, with Brent rallying by almost 40 per cent to $61 a barrel, as the global oil glut that had built up over the previous three years starts to draw down.

With Foreign reserves at $33.83bn, it has reached a two-half year high this year amidst foreign exchange intervention put in place to the various exchange markets by the CBN.

For the third quarter of 2017, the external reserves gained $7.53bn or 29.2 per cent from $25.8 billion it opened January to $33.33 billion, the highest in almost three years.

Considering the total traded value on NAFEX window in the last two months, findings by our correspondent showed that the just concluded month (October) recorded total traded value of $4.36bn, lower than $4.60bn sold in September, indicated an increase of 30.20 per cent ($1.08bn) when compared with the value recorded in August ($3.53bn).

CBN spokesman, Mr. Isaac Okorafor, had noted the increase in foreign reserves can be attributable to peace in the oil-rich Niger-Delta region of the country, which resulted into increased oil output and earnings.

He had said with the sustained interventions, the apex bank has been able to push foreign exchange demand away from the parallel market into the formal regulated market.

In the second quarter, the oil sector grew significantly by 17.04 percentage points from -15.40 per cent recorded in Q1 2017 to 1.64 per cent, reflecting the relative peace in the Niger Delta, increased oil output from the region and increase in oil prices.

The nation’s economy, which recently exited from recession, with data from the National Bureau of Statistics (NBS) showing that the Gross Domestic Product (GDP) expanded by 0.55 per cent in the second quarter (Q2) of 2017.

The growth in GDP was driven mainly by the performance of the oil & gas and three other sectors, including agriculture.

Between January and September 2017, the foreign reserves gained $7.53bn or 29.2 per cent from $25.8bn it opened January to $33.33bn- that was the highest in almost three years.

Between January and August, the foreign exchange buffer of CBN has appreciated by estimated $5.97bn from $25.8bn it opened this year.

Statistics on the CBN website revealed that the external reserves increased by 17.2per cent, to $30.29bn on March 30, 2016, from $25.84bn it opened this year.

Specifically, the external reserves for the first time in 2017 hit $30bn on March 8, and hovering around $29bn and $28bn in February.

OPEC price basket of 14 crudes had closed at $50.04 a barrel in March.

The Federal Government’s 2017 Budget was based on the production of 2.2 million barrels bp/d at the reference price of $42.5 per barrel in the global market, a benchmark the executive used in preparing the budget.

Finance experts had said steady increase in global oil prices continued to impact on CBN’s foreign exchange buffer and the nation’s economy in general.

Motolani Oseni, Lagos