FOREX Reserves Hit $31.8bn - CBN Discloses

The Central Bank of Nigeria (CBN) has disclosed that its foreign exchange reserves gained estimated $968 million when it rose to $31.8 billion on August 29, 2017.

The apex bank did not provide reason (s) for the increase in dollar buffer to $31.8 billion, but LEADERSHIP reports that it gained 3.14 per cent in August this year from opening figure of $30.8 billion.

The foreign exchange reserves opened the year at $25.8 billion, up 23.1 per cent from the previous year, still far off a peak of $64 billion hit in August 2008.

In the last eight months, the foreign exchange buffer of CBN has appreciated by estimated $5.97 billion from $25.8 billion it opened this year despite the apex bank’s unrelenting intervention in the foreign exchange market.

Experts said steady increase in global oil prices continued to impact on CBN’s foreign exchange buffer, though it dropped to $49.41 a barrel last week Wednesday compared to  $49.51 the previous day, Organization of Petroleum Exporting Countries (OPEC) daily basket price explained.

But traders said high production OPEC was capping prices. OPEC and other producers, including Russia have promised to restrict output by 1.8 million barrel per day until March 2018 to help support prices and draw down inventories.

The CBN had disclosed that reserves appreciated by $554.7 million or 1.8 per cent in July when it closed July at $30.8 billion from $30.29 billion it opened the month under review.

The $30.8 billion foreign reserve reordered by CBN was the highest since May 12, 2017, as global oil prices stabilized and inflow from International Money Transfer Operations continued to increase.

The foreign reserves appreciated by $4.45 billion in first quarter (Q1) of 2017 amid CBN sustained pressure in bridging the gap between official foreign exchange and parallel market rates with the introduction of several foreign exchange windows.

Statistics on the CBN website revealed that the foreign exchange reserves increased by 17.2per cent to $30.29 billion on March 30, 2016 from $25.84 billion it opened this year.

Specifically, the foreign reserves for the first time in 2017 hit $30 billion on March 8, and hovering around $29 billion and $28 billion in February.

While OPEC price basket of 14 crudes had closed at $50.04 a barrel in March, finance analysts said the steady increase in global oil prices has positively impacted on CBN’s weekly intervention and foreign reserves.

The federal governments 2017 budget was based on the production of 2.2 million barrels per day at the reference price of $42.5 per barrel in the global market, a benchmark the executive used in preparing the budget.