The nation’s foreign exchange (Forex)
reserves have recorded an increase of $860 million after a four-week persistent
and gradual gain despite pressure at both the interbank and parallel markets.
The
development now brings the stock of the reserves to $25.36 billion, up from
$24.49 billion in the corresponding period of last month, representing about
3.5 per cent rise. Forex
reserves are money or other assets held by a central bank or other monetary
authority, which can be used to pay for a country’s liabilities. The reserves
also include the various bank reserves deposited with the central bank by other
banks. Countries use the forex reserves to support their own currency, while
also helping them guarantee their exchange rate.
Within the period, the Central Bank of Nigeria (CBN), the lender of last resort, said it offered real sector operators – manufacturers and other strategic actors in the economy, access to about 7,792 requests for foreign exchange valued at over $867 million through the inter-bank window.
A summary of
the forex utilisation for the month of October 2016 indicated that the raw
materials sector received the highest allotment, getting access to foreign
exchange valued at $355.7 million or 40.99 per cent of the total value of Forex
utilisation for the month put at $867.8 million.
By the
resurgent reserves profile, a new hope is rising over the country’s ability to
raise its forex defence strategy to enable it provide for the huge demand and
support the ailing Naira value that has long eroded due to lack of forex. The
forex reserves have also recorded an increase of $1.46 billion in the last two
months, from a low of $23.9 billion in October to $25.36 billion presently.
The new
level represent a four-month record high since end of August 2016, after
gaining a persistent daily average growth of about 2.8 per cent from the end of
October till date. In the same period in November, the reserves recorded an
increase of $589 million, after weeks of consistent and gradual gains, despite
demand pressure, bringing it to $24.49 billion, up from $23.91 billion. That
was a 2.5 per cent rise.
It also
closed up a two-month decline to $247 million, after losing $836 million
between September ($24.74) and October ($23.91).The international price of
crude oil has remained relatively stable in recent weeks, although the
country’s production has been below expectation down to 1.6 million barrels
daily due to the activities of militants.
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