Nigeria external reserves jumped to US$36.23 billion in January from the November 2020 figure of $34.94 billion representing N1.29 billion increase on the back of partial global economic and rally in the prices of oil.
Most importantly, the optimism from the discovery of the vaccine to curb the spread of the Covid virus also impacted on Nigeria’s external reserves, sending up the figure.
The Central Bank of Nigeria (CBN) at end of its maiden Monetary Policy Committee for the year said the figure rose to the current figurea s of 21st January 2021. The plunge in the oil prices and the uncertainty about the dreaded infection has affected the global economy and setting Nigeria economy which relies more oil on a free fall and into recession.
Furthermore, the period under review, also showed that money market rates remained low, reflecting the prevailing liquidity conditions in the banking system.
Overall, the monthly weighted average Open Buy Back (OBB) rates declined further from the 1.13 per cent in November 2020 to 1.09 per cent in December 2020.
On the equities market, the Committee noted the positive performance, particularly the sustained patronage by domestic investors largely driven by the prevailing low yields in the money market.
“The All-Share Index (ASI) rose 0.83 per cent. by 27 January, gaining 345.79 index point to close at 41,930.73 basic points, from 40,270.72 points on 31st December, 2020. Similarly, the market capitalisation rose to N21.934 trillion, from N21.06 trillion over the same period”, on the back of the improved performance gains recorded in medium and large capitalized companies, notably in consumer goods, banking, insurance and oil and gas sectors.
The Committee, however, noted a marginal increase in the Non-Performing Loans (NPLs) ratio which rose to 6.01 per cent at end-December 2020 from 5.88 per cent at end-November 2020 and above the prudential maximum threshold of 5.0 per cent.
While noting that this development is not unexpected under the prevailing circumstances, it urged the Bank to strengthen its macro-prudential framework to bring NPLs below the prescribed benchmark.
On the performance of monetary aggregates, the Committee noted the further growth in broad money supply (M3) to 10.97 per cent in December 2020 from 5.02 per cent in November 2020, driven largely by the growth in Net Foreign Assets.
It also noted the expansion in Net Domestic Assets (NDA) to 4.96 per cent from -0.45 per cent in the previous period.
Aggregate domestic credit, also moved further up by 13.40 per cent in December 2020, compared with 9.48 per cent in the previous month.
This was largely attributed to the Bank’s policy on Loan-to-Deposit Ratio (LDR), complemented by its interventions in various sectors of the economy.
Consequently, the banking sector gross credit as at end-December 2020 stood at N25.02 trillion compared with N24.25 trillion at the end of November 2020, representing an increase of N774.28 billion.
Under the Bank’s real sector interventions, under the Anchor Borrowers Programme (ABP), N554.63 billion had been disbursed to 2,849,490 beneficiaries since the inception of the programme, of which N61.02 billion was allocated to 359,370 dry season farmers.
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