The nation’s external reserve has risen to a two year high of $31.2 billion even as the Naira yesterday appreciated to N367.5 kobo at the Investors & Exporters (I&E) window.
Data from the Financial Market Dealers Quote (FMDQ) showed that the indicative exchange rate for the window, also known as, Nigeria Autonomous Foreign Exchange, NAFEX, dropped from N368.17 per dollar on Tuesday to N367.5 per dollar yesterday, translating to 67 kobo appreciation for the Naira. This is in contrast to the N1.73 depreciation suffered by the Naira in the market in the first two days of the week.
The Naira, however, remained stable at N366 per dollar in the parallel market exchange rate. Meanwhile data from the Central Bank of Nigeria (CBN) revealed that the reserve rose to $31.2 billion on Monday, August 8th from $30.88 billion on August 1st.
Since July 2015 when it rose to $31.46 billion, the external reserve declined steadily till October 2016. From $23.89 billion on October 19th 2016, the reserve rose steadily to a new high of $30.98 billion on May 4th 2017. Since then the reserve fluctuated due to a combination of increased dollar sales by CBN and decline in crude oil price.
This trend changed on July 7th 2017, with the reserve recording steady rise, buoyed by improved foreign exchange inflow occasioned by increase in crude oil price, dollar inflow from foreign portfolio investors facilitated by the Investors and Exporters (I&E) window introduced in April, as well as reduction in dollar sale through CBN’s forex intervention. According to the CBN, the reserve has risen by $890 million between July 7th and August 8th this year.
