The foreign reserves of Nigeria has increased amidst tremendously as the country struggles to giggle out of recession.
The nation’s foreign reserves reached $30.5 billion last week as a
result of increased global oil prices, checks by a correspondent on the
Central Bank of Nigeria’s (CBN) website have revealed.
Data from Organization of Petroleum Exporting Countries (OPEC)
revealed that basket of 14 crudes stood at $47.48 per barrel last week
from $45.21 a barrel it opened in July.
Experts said world economic growth in 2018 is forecast at 3.4 per cent, the same level of growth forecast for 2017. “This
reflects a continued strengthening of the global recovery which is
becoming more balanced, with stability in the oil market remaining a key
determinant. Global growth in 2017 is expected to be around 1.27
million barrel per day, broadly unchanged from previous month, average
96.4 million barrel per day”, they said.
According to report, Nigeria’s crude oil production had been stuck
on 1.8 million barrel per day and has now recorded an additional 200,000
barrels per day.
In June, the foreign reserves dropped by $41 million or 0.13 per
cent to $30.29 billion when it opened in June to close at $30.33
billion.
Analysts had attributed the steady fall in the foreign reserves to
CBN’s aggressive interventions in the foreign exchange market aimed at
boosting naira and stabilizing the exchange rate.
The CBN in April opened a new special foreign exchange window
dedicated to investors, exporters and end users. According to analysts,
external reserves of $30.5 billion will cover imports for a period of
over six months.
In a circular entitled, ‘Establishment of Investors and Exporters
Window’, the CBN claimed this new window was introduced to boost
liquidity in the foreign exchange market and ensure timely execution and
settlement of eligible transactions.
In its economic report for May, CBN said the external sector
weakened in the month under review due to the decline in crude oil
prices from an average of $52.90 per barrel in April 2017 to $51.04 per
barrel.
Increased shale oil production in the United States and supply by
non-members of the OPEC both contributed to the fall in crude oil
prices.
The report said, “Consequently, foreign exchange inflow through
the CBN, at $2.26 billion, declined by 21.4 per cent below the level in
the preceding month, but was 27 per cent above the level in the
corresponding period of 2016. The decline relative to the level in the
preceding month was driven by fall in both oil and non-oil proceeds.
“Overall, the net outflow through the Bank in the month of May
2017 was $0.76 billion, in contrast to a net inflow of $0.71 billion and
$0.09 billion recorded in the preceding month and the corresponding
period of 2016, respectively”.
It noted that aggregate foreign exchange inflow into the economy
amounted to $5.78 billion, representing five per cent decline below the
level in the preceding month, but showed an increase of 30.8 per cent
above the level in the corresponding period of 2016.
The report further noted: “The development relative to the
preceding month reflected the fall in inflow through the Bank. Inflow
through autonomous sources and the Bank were $3.52 billion and $2.26
billion and, accounted for 60.9 per cent and 39.1 per cent of the total,
respectively.
“Non-oil sector inflow, at $1.39 billion (23.1 per cent of the
total), fell by 30.2 per cent, below the level in the preceding month.
Autonomous inflow rose by 9.8 per cent, above the level in April 2017.
“Aggregate foreign exchange outflow from the economy, at $3.18
billion, rose by 38.8 per cent and 70.4 per cent, above the levels in
the preceding month and the corresponding month of 2016, respectively.
“Thus, foreign exchange flows through the economy, resulted in a
net inflow of $2.60 billion in the review month, compared with $3.79
billion and $2.55 billion, in April 2017 and the corresponding month of
2016, respectively,” it added.
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