The nation’s foreign reserves has appreciated by $7.44 billion in first three months of 2018 on the heels of steady increase in global oil prices and increased activity in the investor exporter window.
The foreign reserves opened this year at $38.77 billion to close March 28, 2018 at $46.21 billion, an increase of 19.2 per cent this year.
In February, the foreign reserves added $1.8 billion or 4.44 per cent to $42.92 billion from $40.69 billion it opened while in January, it gained $1.9 billion or 4.95 per cent to $40.69 billion from $38.77 billion it opened in 2018.
According to InsideBusiness online findings, the price of Organization of Exporting Countries (OPEC) daily basket price stood at $66.05 a barrel on March 28, 2018.
Global Oil prices continued to rally above $60 per barrel extended to new heights in 2017 with Brent crude climbing to a level last seen in mid-2015, stoking hopes in the industry that the market has finally turned a corner following a three-year slump.
An oil price recovery has been under way since June last year as crude demand finally starts to outpace supply, with Brent rallying by almost 40 per cent to $61 a barrel, as the global oil glut that had built up over the previous three years starts to draw down.
The CBN Governor, Mr. Godwin Emefiele, had projected that the nation may achieve $60 billion foreign reserves in 2019, should this trend persist.
He said increases in the price and shipment of oil, Nigeria’s biggest foreign-currency earner, and improved investor confidence mean the CBN can build its reserves to $60 billion in the next 12 to 18 months, from $40 billion currently.
“Things are looking up. No one ever thought the price of crude would hit $70 in such a short period of time”, he said during an interview with Bloomberg.
The foreign reserves monitored by CBN opened 2017 at $25.84 billion and grew to $38.73 billion as at December 28, 2017.
In September 2008, Nigeria’s foreign exchange reserves hit $62 billion, with federal government spending $12 billion to settle external debts.
However, theme on the foreign market remained stability, as the Dollar against Naira traded flat at N362 all week in the parallel market, while it strengthened by 0.14per cent to N360.20 in the Investors & Exporters foreign exchange window.
Analysts at Cordros Capital said, “The foreign reserves continued to record steady accretion, as it increased by 1.21per cent to cross the $46 billion-mark at $46.21 billion.
“Rates are likely to continue trading within current bands, as oil revenues (driven by stable oil prices and production) further shore up foreign reserves, aiding the apex bank’s interventions in the foreign exchange market.”
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