After Nigeria’s external reserves went on a downward slide last year losing $11.75 billion within a space of 10 months, the reserve received a new lease of life as it went up by 7% in 21 days, available data from the Central Bank of Nigeria, CBN has shown.
As of May 12, 2020, the reserve stood at $34.78 billion but went up to $35.77 billion by Thursday, May 21, 2020 gaining $2.338 billion in the process. The External Reserves is expected to hit $36 Billion when the latest figure is announced on May 29, 2020.
The reserves have been rising since April 29, following the release of $3.4 billion to Nigeria by the International Monetary Fund, IMF, through its Rapid Finance Instrument, RFI, to support the country’s efforts against the COVID-19 pandemic.
Despite the volatility of the foreign exchange market due to a decline in crude oil export earnings, the external reserves increased sharply by almost $1 billion in just 9 days, rising from the $34.78 billion that it recorded on May 12, 2020, to about $35.77 billion that it ended with on May 21, 2020.
Nigeria’s external reserves have been on a steady increase since April 29, 2020, when it stood at $33.42 billion. This represents an increase of about $2.35 billion or 7% in 21 days.
It should be noted that Nigeria’s external reserves went on a downward slide last year, after hitting a peak of $45.17 billion on June 11, 2019, thereby losing $11.75 billion within a space of 10 months.
The recent gradual increase of the external reserves and improved liquidity in the foreign exchange market, thanks to the CBN, have helped to strengthen the naira at the Investors and Exporters (I&E) window. This was especially the case last week when the naira exchanged at N385.94 to a dollar from N386 to a dollar.
Recall that just last week, the CBN Governor, Godwin Emefiele warned against patronizing the parallel market operators saying those who do risk losing money. According to him, the rates they are buying dollar now are unrealistic and possibilities abound that they will lose their money if they continue to do so.
