Nigeria’s
foreign exchange (forex) reserves have increased to $27.223 billion as at
January 16, 2017, according to latest figures on the Central Bank of Nigeria’s
(CBN)
website.
The growth in
the reserves, derived majorly from the proceeds of crude oil sales represented
an increase by $1.380 billion or 5.3 per cent in the last 17 days, compared
with the $25.843 billion that it was as at December 30, 2015.
It was also
indicative that the drop in militancy in the Niger Delta and rising oil exports
led to the accretion in the forex reserves.
Oil prices
settled up on Monday, as Saudi Arabia’s commitments to reducing production
offset a report forecasting U.S. output would again rise this year.
Benchmark
Brent crude oil LCOc1 was up 41 cents a barrel, or 0.7 percent, at $55.86 and
U.S. West Texas Intermediate crude rose 27 cents, or 0.5 percent, to $52.64 a
barrel, on Monday.
With the oil
market entering 2017 with prices above $50 per barrel, analysts are optimistic
about high prices this year.
Meanwhile,
Vice President Yemi Osinbajo tuesday said the country needs to close the gap
between the official and black market rates for the naira against the dollar
“very soon”, as Africa’s largest economy grapples with inflation and the risks
of devaluation.
“The gap
between the official and parallel market isn’t helpful,” Reuters quoted
Osinbajo to have told reporters at the World Economic Forum in Davos.
“If you look
at the economic recovery and growth plan, it is the expectation that this is a
conversation we are having with central bank.”
The naira’s
official rate, controlled by the government is currently at N305 to the dollar
since it was devalued in June. But that is still 40 percent stronger than rates
on the parallel market, about N497 to the dollar, a gap that is discouraging
investment from overseas and leaving Nigeria starved of foreign currency.
The official
and black market naira foreign exchange rates will be “unified” this year, but
there is no time frame for when it could happen, said Osinbajo.
Financial
institutions, among others, have argued that Nigeria must allow its currency to
float freely to solve its foreign exchange woes, a measure which has met
opposition from President Muhammadu Buhari.
Nigeria’s lack
of dollars has been exacerbated by a crunch in oil production, caused by
militant attacks on facilities in the crude oil-rich regions in the South-east
Delta region, and low global prices for oil, on which the government depends
for 70 percent of its revenues.
“The current
output is 1.7-1.8 million barrels per day and it could improve very quickly as
soon as we sort out things in the Delta,” Osinbajo said.
In an effort
to end militant attacks and remain “actively engaged”, Osinbajo travelled to
the Niger Delta region for talks with militants earlier this week.
Additionally,
Nigeria aims to sell Eurobonds worth $1 billion in March, said Osinbajo, rather
than February as originally hoped, which could help refill the government’s
coffers.
This day
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