Nigeria's external reserves added $1.78 billion in 14 days

The rise came despite impacts of covid-19 on crude oil prices.

Monday, May 25, 2020

/ by National Pivot

Despite concerns over dwindling oil revenue caused by the impact of lockdown across the world to contain the spread of covid-19, the nation’s external reserves gained total sum of $1.78 billion in 14 days to close last Thursday at $35.77 billion from $33.99 billion it stood at the beginning of May, data obtained from the official website of the Central Bank of Nigeria (CBN) has shown.

Looking at the foreign reserves figure which stood at an average of $34 billion when activities opened for May, before climbing to $35.03 billion on May 14th, however, it gained $730 million in just one week to steady at $35.77 billion as of 21st of the same month.

Consequently, the Naira gained some ground against the dollar by 0.20 per cent week-on-week (w/w) to N385.94/USD at the Investors & Exporters Foreign Exchange (I&E FX) window but slid by 2.1per cent w/w to N460.00 against the dollar in the parallel market.

“In the Forwards market, the naira appreciated against the dollar across all contracts, save for the 1-month (-0.02 per cent to N388.21/USD).

"Notably, the 3-month (+0.2 per cent to N391.62/USD), 6-month (+0.5 per cent to N396.74/USD), and 1-year (+1.0 per cent to N414.48/USD), contracts all recorded stronger naira values against the greenback.

“We still hold the view that the RFI inflow will continue to provide short-term support for the FX reserves.

“Nonetheless, we expect the currency market to remain largely volatile, especially in the parallel as the CBN’s suspension of FX sales to BDCs continues to create a backlog of unmet FX demand,” analysts at Cordros capital explained.

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