Nigeria's
external reserves has recorded its highest gain in 12 months, data collected
from the website of the Central Bank of Nigeria
- This
increase comes even as naira closed at 386 per dollar against the 388 it traded
for previously
- There was
also a drop of $77.2 million to a balance of $30.98 billion it recorded about
seven days earlier
Nigeria's
external reserves has recorded its highest gain in 12 months, data collected
from the website of the Central Bank of Nigeria (CBN).
This
increase comes even as naira closed at 386 per dollar against the 388 it traded
for previously.
Checks also
revealed that as at May 4, the reserve was at $30.98, an approximate of $31
billion compared to the year's balance of $26.94 - a $4 billion growth
difference.
While the
latest reserve balances at $30.922 billion on Thursday, May 11, which shows a
decline of $11.3 million against $30.922 the previous day.
There was
also a drop of $77.2 million to a balance of $30.98 billion it recorded about
seven days earlier.
While at the
end of January the reserve showed an increase of $2.3 billion.
Reacting to
the reserve growth, the chief executive officer of Economic Associates Ayo
Teriba said that the recession, inflation and weakness of the naira which has
been experienced in Nigeria is likely to come to an end soon.
Teriba said
the oil prices has risen from a low of $28 per barrel in the first quarter of
2016 to $55 in the first quarter of 2017.
He added
that the price of oil may average to about $55 through 2017.
“The
parallel market rate is beginning to appreciate in response to improvements in
the central bank’s capacity to supply foreign exchange, with the parallel
market rate rising to N380/$ in March 2015, after touching an all-time low of
N520/$ the month before.
If the oil
price holds up at the current level and external reserves continue to grow, the
parallel market rate will continue to appreciate until it converges with the
inter-bank rate," Teriba said.
Also
advising the Central Bank of Nigeria (CBN) Teriba said: "A better response
would have been for the CBN to look beyond the current account and boost
foreign exchange inflows on the capital account to counter the downswing.
The problem
was the sharp drop in foreign exchange supply that a fall in oil price from
US$110 per barrel in 2014, to $53 in 2015, and $28 in the first quarter of 2016
implied. Boosting supply would have been a better way to stabilize the market
than restricting demand to amplify the downswing, or attempting to float the
exchange rate in the face of the supply shortfall as the CBN did," he
said.
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