External reserves hit $45.12bn amid steady Forex injection

…Represents highest figure in 9 months

…Gains over $2bn in 5 months

Motolani Oseni

Despite the Central Bank of Nigeria (CBN) intervention in the foreign exchange market, the external reserves is currently standing at a hit nine months high of $45.12billion, checks by The Daily Times revealed.

What this development meant is that the foreign exchange buffer has increased by
$2 billion in the first five months this year to close at $45.12 billion, as of 31st May 2019.

It is also, worthy of note that the $45.12 billion external reserves figure by the CBN is the highest this year. The apex bank had attributed to increasing in external reserves to hike in global oil prices, inflow from foreign countries most especially China, among others.

According to Organization of Petroleum Exporting Countries (OPEC), oil price between January and May has increased by 23per cent or $12.02 to $64.15 from $52.14 it opened this year.

The OPEC 14 basket price revealed that oil price reached a peak of $74.04 on April 24, 2019.

Monthly breakdown revealed that February reported dwindling external reserves while March reported one of the highest gains in foreign exchange buffer of the CBN.

As the external reserve closed January at $43.17billion after gaining $98.5 million, it dropped by $873.34 million in February to $42.3 billion.

However, in March, the external reserves significantly increased by $2.1 billion from $42.32 billion to $44.43 billion.

But the significant increase was not sustained in April as the external reserves moved from $44.61 billion to $44.79 billion but moved inched up by $330.5 million to close at $45.12 billion in May.

A member of the CBN Monetary Policy Committee (MPC) said foreign inflow to the nation’s economy remains impressive showing strong confidence in the economy.

“Though this global macroeconomic condition poses a challenge for monetary policy in Nigeria, the prospect for higher and stable international crude oil prices, as well as, positive fundamentals attractive to foreign inflows provides a reasonable buffer,” he maintained.

The CBN Governor, Godwin Emefiele had said the introduction of the Investors & Exporters (I & E FX) window, along with improvement in domestic production of goods, helped shore up the country’s external reserves.

He said, “Transactions have reached over $48billion since the inception of the window and our foreign exchange reserves have risen to $45billion in April 2019 from $23billion in October 2016.

“Nigeria’s current stock of foreign reserves is now able to finance over nine months of the current import commitments. “With improved availability of foreign exchange, the exchange rate at the I&E FX window has remained stable over the past 24 months at an average of N360/$, and the parallel market exchange rate has appreciated from N525/$ in February 2017 to N360/US$ today.”