External reserves hit $44.78bn amid hike in global oil prices

…Gains $10.520m in one day

…As CBN lifts forex market, moves to end dirty naira notes

Motolani Oseni

Amid increase in the global oil prices to above $73 per barrel, the Nigerian external reserves under the care of the Central Bank of Nigeria (CBN), has increased to $44.787 billion as of April 25, 2019.

At the close of last week trading activities on Friday, the foreign exchange buffer stood at $44.787 billion against $44.777biliion it recorded a day before, appreciating by a total sum of $10.520 million in just one day.

Considering the opening figure of $44.6 billion that was declared by the apex bank as of April 1, 2019, the foreign reserves has gained a whopping sum of $179,929,770 before the end of the month.

In fact, the reserves stood at $43.17 billion as of end to close March 30, 2019, compared to the current figure of $44.78 billion.

A quick check at the historical foreign reserve data shows that Nigeria’s foreign reserve recorded value above the $44.1 billion marks in September 2018, representing an increased to an all-time high in six months.

A breakdown of the increase in the reserves showed that it added $4.2 million or 0.10 per cent to close at $43.174 billion in January 2019, from $43.17 billion it closed for 2018.

In February, the foreign exchange buffer depreciated by $873.34 million or 2.02 per cent to $42.29 billion from $43.17 billion whilst in the third month, March, it appreciated significantly by $2.1 billion or 4.99 per cent to $44.43 billion from $42.3 billion it opened in March.

Experts attributed an increase in CBN’s foreign reserves to a steady increase in global oil prices and increase inflow from the diaspora.

Meanwhile, the apex bank has continued to intervene in the inter-bank foreign exchange market, injecting the total sum of $1.132 billion in April 2019.

The CBN at the mid of last week injected fresh $210 million to sustain liquidity in that segment of the market. But this in addition to $922.6 million and CNY 70.6 million injected into the foreign exchange market in the last three weeks.

The breakdown of the$210 million fresh injections by the CBN showed that authorised dealers in the wholesale segment of the market, as in previous deals, were offered the sum of $100 million.

Those in the Small and Medium Enterprises (SMEs) the segment got a boost of $55 million.

Customers purchasing foreign exchange for Invisibles such as tuition fees, medical payments and Basic Travel Allowance (BTA), among others were also allotted a total of $55 million.

The Bank’s Director, Corporate Communications Department, Mr. Isaac Okorafor, confirmed the transactions, reiterating that the CBN will continue to ensure the availability of foreign exchange in order to ensure continued stability in the markets.

The intervention by the apex banking regulatory body is on the measures to strengthen the naira against other foreign exchanges and also, in a move to bridge the gap between the official rate and the parallel market rate.

The Naira, at the end of last week, remained stable across forex segments, exchanged at an average of N359 to the dollar, N405 per Euro and N471 against the pound in the BDC segment of the foreign exchange market.

The Daily Times checks, however, showed that the naira also stabled at N306.90 per dollar at the Central Bank of Nigeria (CBN) official rate, but opened at a slightly lower rate of N360.30 to the dollar, at the investors’ FX segment, but closed at an appreciable rate of N360.64 compared to the rate it traded the previous day.

Meanwhile, as part of efforts to end the circulation of dirty, mutilated and counterfeit banknotes, the CBN has put together a Clean Note Policy and Banknote Fitness Guideline.

The CBN in a statement revealed that the guideline document will be unveiled on Tuesday, April 30, at the Eko Hotel and Suites in Lagos.

“These documents were developed after extensive collaboration and engagements with key industry stakeholders under the auspices of the Nigerian Cash Management Scheme, a Bankers’ Committee initiative”, the statement said.

“The Clean Note Policy provides a uniform standard for the circulation of only clean and fit banknotes in Nigeria; while the Banknote Fitness Guidelines provide the industry with clear and acceptable criteria for determining the quality of banknote in circulation.

“The intention of the Bank is to ensure that unfit, dirty, mutilated and counterfeit banknotes are not in circulation in Nigeria. This is pursuant to Section 18, 20 & 21 of the CBN Act 2007 which prohibits the counterfeiting, sale and abuse of the Naira, the apex bank added.”

CBN also said it has developed a mechanism to ensure full compliance with the documents, adding that it would provide complaint channels like phone numbers and emails to enable the public to provide information about infractions.

Additionally, the apex bank canvassed for the cooperation of deposit money banks (DMBs), microfinance and merchant banks, government agencies, Cash-in-Transit (CIT), currency management equipment manufacturers and the general public to achieve recirculation of high-quality notes.