Nigeria’s External Reserves Further Gain $18.4m in One Week

By Ashemiriogwa Emmanuel

The external reserves of Nigeria recorded a 0.05 per cent or $18.4 million increase last week, closing at about $33.58 billion compared to the $33.57 billion recorded in the preceding week.

The continuous climb in the nation’s external buffers is coming amid the uncertainty around crude oil prices in the face of the surging COVID-19 cases worldwide.

Recall that last Monday, Business Post reported that the price of crude oil dropped below $70 per barrel following the imposition of more travel restrictions to fight the virus by the world’s top crude importer, China.

However, on Wednesday of the same week, crude oil prices appreciated as the United States called on the Organisation of the Petroleum Exporting Countries and allies (OPEC+) to increase supply as a means to encourage global recovery from the pandemic.

The price of crude oil, which is the country’s main source of foreign exchange (FX) income, has posed a chief influence on the nation’s external reserves.

According to data sourced by Business Post from the Central Bank of Nigeria (CBN), the nation’s FX reserves reduced by $4 million from $33.566 billion recorded on Thursday, August 5 to the $33.562 billion of the following day.

The amount then expanded by $6.3 million to $33.568 billion on Monday, August 9, and maintained a steady increase to $33,589,082,687 on Tuesday and to $33,586,353,083 before receding to $33,584,267,291 on Thursday, August 12.

Meanwhile, the foreign reserves of Nigeria are expected to swell by $3.35 billion next week when the International Monetary Fund (IMF) will credit the CBN account with the Special Drawing Rights (SDRs) allocated to the West African giant.

The country is expecting to be credited with the IMF SDR on Monday, August 23, and when this is done, the country’s reserves should increase to nearly $40.0 billion or more.

Nigeria is among the countries allocated the SDR by the IMF. The money is expected to boost the nation’s economy, especially help the ability of the apex bank to support the Naira at the FX market by boosting liquidity in the ecosystem.