Business Post Contributor
By Ashemiriogwa Emmanuel
The total amount in the external reserves of Nigeria over the last week experienced a sloppy trend but eventually, it settled at $33.57 billion on Thursday, August 26, Business Post reports.
Data from the Central Bank of Nigeria (CBN) showed that the nation’s buffers increased by 0.15 per cent or over $55.0 million.
In the preceding week, the amount left in the external reserves of Nigeria, which is Africa’s largest economy, stood at $33.52 billion, according to the apex bank.
It was observed that the reserves depleted from $33.52 billion on Thursday, August 19 to $33.50 billion on Friday, August 20 and shrank to $33.43 billion on Monday, August 23 and further depreciated to $33.40 billion last Tuesday but rose to $33.48 billion last Wednesday.
The decline recorded in the first few days may have been due to the decline in the prices of crude oil at the international market and when prices moved higher later in the week, the reserves responded by also rising.
The major source of foreign exchange (FX) earnings for Nigeria is crude oil and mostly, when prices go up at the global market, the buffers grow.
Business Post reported last Wednesday that oil prices rose by more than one per cent after government data from the United States showed that fuel demand climbed to its highest since the start of the COVID-19 pandemic.
Meanwhile, Nigeria’s foreign reserves were supposed to grow by $3.35 billion from the $650 billion Special Drawing Rights (SDRs) approved by the International Monetary Fund (IMF) to boost global liquidity.
The account of the CBN was expected to be credited with the amount on Monday, August 23, but data from the apex bank showed that the money was yet to reflect it.
While fingers are crossed on the maturity of the collection, the nation’s foreign reserves, after receiving the allocation, will expand the capacity of the CBN to fund higher volumes of external transactions and achieve a further convergence of the exchange rate at the Investors and Exporters (I&E) window.
