External reserves rise by $1bn in two weeks – Punch

dollar to naira

Oyetunji Abioye

The country’s external reserves have hit $26.968bn, nearing the $27bn mark, the latest statistics posted on the Central Bank of Nigeria website have shown.

The reserves rose to $26.968bn on January 13 from $26.765bn on January 11, having hit $26.658bn and $26.552bn on January and 10 and January 11, respectively.

Between December 30, 2016 and January 12, 2017, the foreign exchange reserves rose from $25.8bn to $26.8bn, indicating an accretion of $1bn in two weeks, the CBN data showed.

The foreign exchange reserves have been rising significantly in recent weeks following the gradual increase in crude oil price and production output.

Experts said the slowdown in foreign exchange allocation to forex markets by the CBN might have contributed to the reserves accretion.

Within the space of three days, the reserves rose by $300m from $26.2bn on January 6 to $26.5bn on January 9.

The foreign exchange reserves had hit $26.0bn on January 3, 2017, up from $25.8bn on December 30, 2017, the CBN statistics revealed.

The reserves ended last year with $25.84bn on December 30, 2016.

The foreign exchange reserves had risen to over four-month high of $25.7bn on December 28, up from $25.4bn on December 23.

However, currency and economic experts are not sure if the current accretion in the external reserves’ is sustainable amid a falling naira and acute shortage of dollar in the foreign exchange markets and the economy.

The CBN had spent $4bn from the nation’s external reserves to defend the local currency in the last 12 months, despite the staggering fall in the value of the naira against the United States dollar and other major foreign currencies last year

The controversial defence of the naira by the CBN has come under severe criticism from economists, who believe that the forces of demand and supply should be allowed to determine the exchange rate of the naira, at least to a considerable level.

The country’s reserves had recorded $23.89bn low on October 19.  The reserves dropped by 15.9 per cent between 2015 and 2016