Nigeria's Foreign Reserves Rise To $42Billion!

Latest figures from the Central Bank of Nigeria have shown that foreign exchange reserves jumped to $42.02bn by October 17, the highest in 32 months and an increase of 3.11 per cent, month-on-month.

Figures on the CBN website showed that

 the reserves, which
stood at $40.75bn a month ago, were last around $42.02bn on February 17, 2010, when $42.22bn was recorded.

The Managing Director, Financial Derivatives Company Limited, Mr. Bismark Rewane, in a report made available to our correspondent on Friday, said the level could cover over 10 months of imports.

"Favourable oil prices and a stable oil production of an average of 2.2mbpd have helped boost growth in reserves level. We expect the trend to continue as long as the oil market activities remain buoyant," he added.

The stability in the forex market, according to analysts, attests to the effectiveness of recent exchange rate policy measures.

The premium between official and parallel market declined to N3.25 from the year's peak of N8.57 in June, which is the lowest premium in four months.

Forex reserves had risen to more than 29-month high of $41.12bn by September 26, and were up by 7.16 per cent month-on-month.

The Nigerian National Petroleum Corporation had said about 85 per cent of increase in reserves was from crude oil. Nigeria's crude oil production hit a record high of 2.7 million barrels per day on August 1.

The CBN had reportedly said the nation's external reserves had continued to grow since August 1, 2012.

Consequently, the Minister of Finance and Coordinating Minister for the Economy, Dr Ngozi Okonjo-Iweala, stressed the need for the country to shore up its external reserves.

At a meeting with the Organised Private Sector in Lagos, Okonjo-Iweala had said that there was the need to build up the reserves to $50bn before December.

She said that this would help the country to stand on its feet in the event of any global economic recession.

The CBN sold a total of $10.18bn at the Wholesale Dutch Auction System in the first half of this year. It had sold and offered and sold $14.85bn at the WDAS in the first quarter of last year.

Forex sales were less than the $285m in half of 2012. Half-year WDAS forex supply for 2011 was $14.85bn, as against $10.45bn in 2012, representing a decrease of 29.70 per cent.