External reserves rise by 20% in three months

External reserves rise by 20% in three months
CBN Governor, Godwin Emefiele

The nation’s external reserves have risen by $4.7bn or 20 per cent in the past three months, according to the latest data from the Central Bank of Nigeria.

Statistics on the CBN website on Sunday revealed that the foreign exchange reserves increased from $24.0bn on November 9, 2016 to $28.7bn on February 9, 2017.

The data also showed that within two months, the reserves increased by $3.8bn or 15.3 per cent from $24.9bn recorded on December 9, 2016 to $28.7bn on February 9, 2017.

In the same vein, the reserves have increased by $2.9bn or 11.2 per cent since the beginning of this year till date. Specifically, the external reserves rose from $25.8bn on December 30, 2016 to $8.7bn recorded on February 9, 2017.

The nation’s external reserves had risen by 15 per cent in three months, the CBN data showed in late January.

Specifically, the foreign exchange reserves increased by $3.6bn from $23.8bn on October 19, 2016 to $27.4bn on January 19, 2017.

The country’s external reserves, which have been increasing significantly in recent months, had risen to $27.3bn on January 17 after hitting $26.9bn on January 13.

Within a period of 11 days, the reserves increased by $1bn, rising from $26.3bn on January 6 to $27.3bn on January 17, according to the central bank’s statistics.

The country’s reserves had recorded $23.89bn low on October 19.  The reserves dropped by 15.9 per cent between 2015 and 2016

Following the gradual increase in crude oil price and production output, the foreign exchange reserves have been rising steadily since November, 2016.

Experts, however, said the slowdown in foreign exchange allocation to forex markets by the CBN might have contributed to the reserves accretion.

Currency and economic experts are not sure if the current accretion in the external reserves’ is sustainable amid a falling naira and acute shortage of dollar in the foreign exchange markets and the economy.

The CBN had spent $4bn from the nation’s external reserves to defend the local currency in 2016, despite the staggering fall in the value of the naira against the United States dollar and other major foreign currencies during the period.

The controversial defence of the naira by the CBN has come under severe criticism by economists, who believe forces of demand and supply should be allowed to determine the exchange rate of the naira.

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