Business Post Contributor
By Ashemiriogwa Emmanuel
The external reserves of Nigeria further gained $1.4 billion last week, boosting the total amount in the buffers to $38.2 billion as of Thursday, October 7, 2021.
Data sourced by Business Post from the Central Bank of Nigeria (CBN) showed that the current position of the nation’s FX reserves represents a 3.8 per cent increase from the $36.8 billion recorded a week earlier.
The recent upward progression in the foreign reserves comes as good news to the country, which had been grappling with a shortage in FX, which is putting the Naira under undue pressure.
The recent slide in the buffers had been caused by a decline in the price of crude oil in the global market as well as a drop in the volume of oil produced by the nation.
Earlier last week, Business Post reported that the oil prices have been bullish following the decision by the Organisation of the Petroleum Exporting Countries and allies (OPEC+) to maintain its production increases by 400,000 barrels per day per for this month.
However, it is worth noting that the rising oil prices also places the country in an awkward situation, considering that it has had to pay higher subsidies on petrol.
In this respect, oil experts fear consumers may seek other alternatives as the prices continue to soar.
Meanwhile, the consequential increasing amount in the external reserves is also a pointer that the apex bank has more foreign exchange at its disposal to defend the local currency at the forex market.
With this, the pressure on the country’s exchange rate reduces in essence, given that the apex bank has more FX to intervene in the forex market.
Zooming into the movement in the external buffers for last week, it was observed that the amount significantly went up by $785.8 million from $36.8 billion on Thursday, September 30 to $37.6 billion on Monday, October 4.
The amount then expanded by $424.1 million to $38.0 billion on Wednesday and further grew to $38.2 billion on Thursday, October 7.
