Banks’ foreign assets rise 10.2% on naira adjustment

Banks’ foreign assets rise 10.2% on naira adjustmentThe net foreign assets of banks rose by 10.2 per cent in the first quarter of 2020, according to the Central Bank of Nigeria.

The CBN, which disclosed this in its monthly economic report for the first quarter of 2020, said the increase was due to the exchange rate adjustment during the period.

It said, “Foreign assets (net) of the banking system, on quarter-on-quarter basis, rose by 10.2 per cent to N6.39tn at end-March 2020, compared with the growth of 7.5 per cent in the fourth quarter of 2019, but was in contrast to the growth of 15.3 per cent at the end of first quarter of 2019.

“The increase in net foreign assets was due largely to the exchange rate adjustment during the review period.”

The apex bank stated that claims on domestic economy (net), on quarter-on-quarter basis, grew by 5.0 per cent to N37.97tn at the end of March 2020.

It said, “This reflected wholly the 2.6 and 5.8 per cent increase in net claims on government and claims on other sectors, compared with the growth of 1.4 per cent and 15.9 per cent at the end of the fourth quarter of 2019 and the first quarter of 2019, respectively.

“Net banking system claims on government, on quarter-on-quarter basis, grew by 2.6 per cent at end-March 2020, compared with a growth of 48.0 per cent in the first quarter of 2019, but was in contrast to the 4.4 per cent decline recorded at the end of the fourth quarter of 2019.”

The CBN said the development reflected the increase in holdings of government securities by the monetary authority.

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