External reserves hike by $968m in one month – CBN
Crude oil price enhances reserves, intervention
The Nigerian external reserves has recorded a total gain of $968 million with the current figure of $31.8 billion, as of August 29, 2017.
This represents an appreciable 3.14 per cent in August, compared to the opening figure of $30.8bn, latest Central Bank of Nigeria (CBN) statistics has disclosed.
On Tuesday, August 8, 2017, the nation’s foreign reserves stood at $31.222bn, which at the time indicated highest figure declared in the last 23 months, Daily Times findings showed.
Although, reasons for the recent rise in the nation’s external reserves, according to forex dealers and financial analysts, was not farfetched from crude oil price rise, which settled around $52.10 per barrel, as the foreign exchange reserves gained a whopping $5, 303,556,521bn in just one year, when compared with the latest balance of $31, 222, 178,576bn from $25, 918,622,055bn.
The nation’s forex reserves had recorded an upward swing to $31 bn, after declining to a near $30bn mark two months ago, but the apex bank’s latest update showed significant increase on the reserves table, since the global crude oil prices had been on the rise, while contributing immensely to the upswing in reserves in the past one month.
However, The Daily Times exclusive findings showed that the foreign exchange reserves opened the year at $25.8bn, up 23.1 per cent from a year ago, still far off a peak of $64bn in August 2008.
For instance, in eight months, the Nigerian forex buffer has appreciated by estimated an $5.97bn from $25.8bn it opened this year despite CBN’s unrelenting intervention in the foreign exchange market.
However, financial experts noted that steady increase in global oil prices continued to impact on the CBN’s foreign exchange buffer; though it dropped to $49.41 a barrel last Wednesday; compared with $49.51 the previous day, Organization of Petroleum Exporting Countries (OPEC) daily basket price has explained.
But traders said high production by the OPEC is capping prices.
OPEC and other producers, including Russia, have promised to restrict output by 1.8 million barrel per day until March 2018, to help support prices and draw down inventories.
The CBN had disclosed that reserves appreciated by $554.7m or 1.8 per cent in July when it closed July at $30.8bn from $30.29bn it opened the month under review.
The $30.8bn foreign reserve reordered by CBN was the highest since May 12, 2017, as global oil prices stabilized; and inflow from International Money Transfer Operations continued to increase.
The foreign reserves appreciated by $4.45bn in first three months (Q1) of 2017 amid the CBN’s sustained pressure in bridging the gap between official foreign exchange and parallel market rates with the introduction of several foreign exchange windows.
Statistics on the CBN website revealed that the foreign exchange reserves increased by 17.2per cent to $30.29 billion on March 30, 2016 from $25.84 billion it opened this year.
Specifically, the foreign reserves for the first time in 2017 hit $30 billion on March 8, and hovering around $29 billion and $28 billion in February.
OPEC price basket of 14 crudes had closed at $50.04 a barrel in March
Finance analysts said the steady increase in global oil prices has positively impacted on the CBN’s weekly intervention and foreign reserves.
The Federal government 2017 budget was based on the production of 2.2 million barrels per day at the reference price of $42.5 per barrel in the global market, a benchmark the executive used in preparing the budget.
Stories by Motolani Oseni
