Foreign Reserves Rise By $719m In Eight Days | Independent Newspapers Limited
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Foreign Reserves Rise By $719m In Eight Days

Posted: Jul 13, 2015 at 12:01 am   /   by   /   comments (0)

By Sola Alabadan, Lagos

Nigeria’s foreign exchange reserves which stood at $29.00 billion as at June 30 rose to $29.719 billion on July 8, indicating that it grew by $719 million during the eight day period, data from the Central Bank of Nigeria (CBN), showed on Sunday.

CBN Towers, Abuja

CBN Towers, Abuja

Since June 30, the reserves have been increasing consistently. The figure was $29,077,255,136 on July 1, $29,157,103,039 on July 2, $29,276,820,453 on July 3, $29,548,987,037 on July 6, and $29,630,428,497 on July 7.

The nation’s foreign exchange reserves declined 22.1 percent year-on-year from $37.26 billion as at the end of June.

As at January 5 this year, the CBN had pegged the nation’s foreign exchange reserves at $34.49 billion.

The Federal Government had through fiscal policies made attempts since 2013 to shore up the foreign reserves to $50 billion.

The CBN had in 2014 relied heavily on external reserves to support the Naira which came under pressure following falling international prices of crude oil.

Rather than continue to defend the Naira in order to maintain exchange rate stability, Kate Isabota, an analyst at Dunn Loren Merrifield, advised the CBN to further devalue the currency in the current year to ease the rapid depletion of the nation’s external reserves.

Due to the fact that the nation’s economy is sensitive to oil price shocks, to the extent that any development in the domestic and international oil markets has a ripple effect on most macro-economic indicators, the naira has come under immense pressure which has been largely sustained since August 2014 with the apex bank implementing strategies in a bid to maintain exchange rate stability.

Some of the various policy measures introduced by the CBN in recent months to ease the significant pressure on the naira were the movement of the midpoint of the official window of the foreign exchange market to N168/$1 in November 2014 and the closure of the RDAS/WDAS foreign exchange window in February 2015.

However, she pointed out that the renewed pressure on the naira in recent weeks has exacerbated the depletion of the nation’s external reserves as the CBN remains keen on defending the naira, as the external reserves steadily declined in the last one month to current level of $29.00 billion – the lowest in over 54 months considered.

More recently, the CBN issued a circular which excluded importers of 41 selected goods and services from accessing foreign exchange at the Nigerian foreign exchange markets. They include: rice, cement, margarine, palm kernel/ palm oil products/ vegetable oils, meat and processed meat products, poultry – chicken, eggs, turkey, private airlines/ jets, furniture, toothpicks, textiles, woven fabrics, clothes, plastic and rubber products, soap and cosmetics, tomatoes/ tomatoes paste and euro bond/ foreign currency bond/ share purchases, amongst others.