Tag Archives: Foreign Reserves

Naira at 2017 best as foreign reserves surpass 2016 high

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The Naira is currently at its best point since August 2016, while the nation’s foreign exchange reserves is at the highest point since the fourth quarter of 2015.

The local currency on Thursday appreciated to 390 per dollar, while the foreign reserves rose to $30.348 billion — its highest point since October 2015.

Over the past few weeks, the Central Bank of Nigeria (CBN) has taken a number of policy actions which were woven around stemming the liquidity challenge facing the country’s forex market.

After the Organisation of Petroleum Exporting Countries (OPEC) reached a deal to cut crude oil production in December, oil prices rose to a stable point above $50 per barrel on the global market.

In Nigeria, the federal government sought peace deals with militants Niger Delta, raising Nigeria’s production levels to 2.1 million barrels in February 2017.

This rise in production levels coupled with rise in prices led to a surge in Nigeria’s oil revenue, which began to plunge mid-2014.

Over the last month, the CBN has pumped about $2 billion into the foreign exchange market, in a bid to ensure convergence of all segments of the market.

With the naira trading around 380, 385 per dollar at the parallel market, and the pound and euro going for 490, 420 respectively, the CBN is closer to its goal than it has been at anytime in the last seven months.

 

Source: The Cable

Nigeria’s reserves hit $30 billion, making it the second time under Buhari.

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For the second time since President Muhammadu Buhari assumed office in May 2015, the nation’s foreign reserves has hit the 30 billion dollar mark.

Data retrieved from the central bank’s website show that the reserves, which have experienced a steady day-on-day increase of between 2.30 and 2.75% since January 5, 2017, closed the trading week above $30 billion.

The gross amount in the reserves is $30 billion, of which $29.3 billion is liquid and about $703 thousand is blocked.

The last time the reserves crossed the $30 billion mark was in July 2015, and went as high as $31.63 billion in August before it began to decline.

The reserves were affected by low crude oil prices across the world, which put reduced the availabilty of foreign exchange and in turn, put pressure on the naira.

Back in 2015, CBN was reported to have funded bureau de change operators to support the local currency and bridge the gap between the official and black maket rates.

The rising reserves may be attributed to oil prices, which have soared as a result of agreed production cuts between OPEC and non-OPEC members.

Since February 2017, CBN has been providing foreign exchange to banks to meet the tution, travel and medical needs of customers, thereby reducing the pressure on the naira.

Despite large forex allocation to commercial banks, the reserves have retained its upward trend.

 

Source: The Cable

Nigeria’s foreign reserves hit $28b – CBN

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Nigeria’s foreign reserves have grown to $28.12 billion, according to the latest figures from the Central Bank of Nigeria (CBN) for January 2017. The reserves fell to $23.95 billion in October 2016, stoking fears among foreign investors on the country’s ability to settle dollar-denominated obligations in the midst of falling crude oil prices.

But with the return of stability in crude oil price since November 2016, CBN has kept its intervention volume steady, choosing to save about $4.2 billion, which has raised the reserves’ profile and improved outlook.

In another development, the Central Bank of Nigeria (CBN) yesterday, warned that payment of auction must be given priority and when it fails, must be backed up immediately by collateral as it will automatically become Intra-day Liquidity Facility.

Still, if the SLF is not repurchased by the next business day, the bank will now be barred from the CBN’s Discount Window until the obligation is settled in accordance with the extant law.

The apex bank is raising its supervisory level of the banks, just as it also queried some banks that turned in inaccurate data for foreign exchange utilisation.

The Acting Director of Corporate Communications Department, Isaac Okorafor, explained that the decisions were guided by CBN’s desire to strengthen financial system’s operations.

After a speculative attack on the naira on Monday, exchange rate at the parallel market has appreciated to N495 per dollar from the all-time low of N500 per dollar.

At the interbank market, the rate remained stable at N305.25 per dollar and supported by the daily dollar auction intervention of $1.5 million by the Central Bank of Nigeria.

Meanwhile, the National Bureau of Statistics (NBS) yesterday said that the total value of capital imported into the country in the fourth quarter (Q4) 2016 is $1.5488 billion.

The amount represents a decrease of 15 per cent when compared to import of the third quarter and a decrease in value by 0.52 per cent relative to the fourth quarter of 2015.

Investors want Naira devalued as foreign reserves hit 7-month high

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Despite a record rise in Nigeria’s foreign reserves, which should ordinarily strengthen the naira, investors are asking the Central Bank of Nigeria (CBN) to further devalue the local currency.

The investors insist that the naira, which is trading at 305/$ at the official market and 490/$ at the parallel market, is not adequately priced.

The local currency saw a decline in six-month contracts to its lowest level since September, as crude oil prices rise by over 20 percent after the Organisation of Petroleum Exporting Countries (OPEC) agreed to an output cut.

The nation also saw it foreign reserves rise to its highest point since June 2016, at $26.29 billion.

Despite the positive strides, the Standard Chartered Plc and London-based Duet Asset Management say the nation needs to devalue the naira and loosen capital controls.

Ayodele Salami, who oversees around $450 million of African stocks as chief investment officer at Duet, told Bloomberg that “oil’s rise isn’t enough to eliminate the need for a change”.

Nigeria won’t attract inflows until it weakens its currency, he added.

Samir Gadio, the London-based head of Africa strategy at Standard Chartered, which forecasts the official exchange rate will be steady for at least the first half of 2017, also said Nigeria will eventually take the step.

“Eventually, they’ll have to revert to a more flexible currency regime. But for the time being, there’s no indication from policy makers that this will happen,” he said.

Tunde Bakare, serving overseer of the Latter Rain Assembly, called on the CBN on Sunday to discard the current exchange rate regime, which he regarded as confusing.

Foreign reserves hit $25bn, first time in five months – CBN

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Nigeria’s foreign exchange reserves is back at the $25 billion mark, for the first time in five months.

The reserves, which shows the state of the country’s financial funds in other currencies, had fallen to an 11-year-low of $24.76 billion, earlier in 2016, recording its lowest point since June 2005.

According to data from the Central Bank of Nigeria (CBN), the reserves rose to $25,043,149,161 as at Friday, December 16, 2016.

Since the introduction of the new foreign exchange regime, the CBN has said the inflow of foreign exchange into the Nigerian economy, had been on the rise, with hopes of beating demand.

“The Committee observed that total foreign exchange inflows through the CBN increased by 89.14 per cent, from US$1,092.21 million recorded in July to US$2,065.79 million in August 2016,” Godwin Emefiele, governor of the bank, had said in September.

“This increase was due mainly to receipts of foreign flows within the month. Total outflows, however, decreased by 4.57 per cent from US$2,728.12 million to US$2,603.35 during the same period.

“In direct efforts to deepen the foreign exchange market and stabilize the financial markets generally, a number of policy instruments were deployed since the last MPC meeting, including an increase in the benchmark interest rate.

“Complementary administrative measures were also taken towards achieving this goal, among which was the directive to IMTOs to sell forex directly to Bureau de Change Operators, in order to improve liquidity in that segment of the foreign exchange market.”

As the foreign reserve increases, the naira has however remained “immune” to the rise in foreign exchange, with the naira sliding to 487 against the dollar on Friday, at the parallel market.

The British pound and euro, went for N605 and N510 respectively. The official side of the market traded a dollar for N315 on Friday.

Nigeria’s foreign reserves is dominated in dollars, yuan, pound, euro and a few other currencies.

Foreign Reserves Drop To $29.13b

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The Central Bank of Nigeria (CBN) on Thursday said that the nation’s foreign exchange reserves declined to 29.13 billion dollars as at Dec. 29.

 
The bank said on its Website that the drop represented 2.43 per cent from 29.31 billion dollars recorded as at Dec.23
The News Agency of Nigeria (NAN) recalls that the foreign reserves have been dropping since July 1, 2015.

 
The nation’s external reserves stood at 34.49 billion dollars as at Jan 5, 2015 from the 34.47 billion dollars recorded in Dec. 31, 2014.

 
But shortages of US Dollar has forced Nigeria’s external reserves into a massive decline hitting a new low of 29.73 billion dollar as at Dec. 11, while the value of the Naira declined in the unofficial foreign exchange market.

 
NAN also recalls that the central bank had spent around five billion dollars between January and July defending the Naira, which was hit by the 2014 plunge in oil prices.

 
The CBN in November said it was able to save 300 million dollars as at August from Bureau De Change (BDC), through its provision that request for forex must be accompanied by the BVN of the customers.

 
(NAN)

Nigeria’s Foreign Reserves Drops To $30.04bn- CBN

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Nigeria’s foreign reserves dropped to $30.04 billion by Thursday, November 26, the Central Bank of Nigeria has said.

The bank disclosed this on its website on Monday.

It said the figure dropped by $7 million, from $30.11 billion recorded on October 26.

The bank said the $30.04 billion represented the “gross” amount, while $29.33 billion was “liquid” and $719.32 million “blocked”.

Nigeria’s foreign reserves has oscillated between $28 billion and $36 billion in the last one year.

The reserves hit $36.3 billion in October 2014, fell to $32.4 billion in January 2015, and stood at $28.6 billion by May 2015.

Under the new government of Muhammadu Buhari, it gained marginally to $31.9 billion by July, before sliding again to $29.9 billion by September.

Credit: NAN

Foreign Reserves Rises To $31.89bn

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As a result of tight fiscal policy anchored on blocking of leakages, Nigeria’s foreign reserves has risen from $29.1 billion left by the immediate past government to $31.89 billion presently.

Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele made this disclosure yesterday while briefing the Senate leadership on the state of the nation’s economy and actions being taken by CBN to boost it.

Emefiele, at the briefing explained that though the crash in the price of crude oil in the international market since last year still has serious rippling effect on Nigeria’s economy, being a mono-product one over the years, signs of recovery are already emerging, one of which is the rise in the nation’s foreign reserves from $29.1billion to $31.89billion within a space of five weeks.

He said: “Reflecting the sharp fall in oil prices and speculative foreign exchange activities, the external reserve declined from $37.3 billion in June 2014 to $29.1 billion at the end of June of 2015.

“But today, I am delighted to note that with the strong efforts of President Muhammadu Buhari, to block all leakages as well as the vigilant demand management strategy of the CBN, we have seen our foreign exchange reserve begin a gradual recovery.

“As at the 7th of July, 2015, the reserve stood at $31.89 billion, a trend we find extremely gratifying”.

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