External reserves shed $3.2b in 2016


  • as CBN eases FX pressure on real sector

The latest data  of the Central Bank of Nigeria (CBN) has shown that the nation’s external reserves closed last year (2016) with a total balance of $25.781billion by 29 December, 2016, showing a decline of $3.288 billion  compared with the $29.069 billion it stood as at 31 December, 2015.

This is even as the apex bank reiterates its commitment to its pledge of ease the foreign exchange pressure on manufacturing and agricultural sectors through forward sales under the new flexible Foreign Exchange regime.

However, the latest foreign exchange reserves statistics represent a 12.7 percent decline year on year(y/y), but increased by 4.2 per cent month-on-month, up from $24.69 billion on Nov.28 to $25.781, due to a slight recovery in global oil prices.

Despite demand pressure, the nation’s external reserves and the volume of money or other assets held by the central bank have recorded an increase of $642 million in one month, after weeks of consistent and gradual gains.

Business247 News Online gathered that the increase now brings the stock of reserves to $24.57 billion as at November 24, up from $23.93 billion in the preceding month.  It also closed up a two-month decline to $247 million, after losing $836 million between September ($24.74) and October ($23.91).

All these are in spite of a US$2.3 billion decline in average inflows of foreign exchange into the CBN every month over the last 26 months as revealed by the apex bank governor.

Similarly, CBN disclosed in its data on foreign exchange utilisation for October 2016, that it granted  access to about 7,792 requests for foreign exchange, valued at over $867million through the inter-bank window to enable them source vital raw materials and spare parts for their respective industries.

A summary of the Forex utilisation for the month showed that the raw materials sector received the highest allotment, getting access to foreign exchange valued at $355,744,861.05or 40.99 per cent of the total value of Forex utilization for the month put at$867,834,186.26.

It also showed that manufacturing and petroleum industries got access to $91,276,699.30 and$150,815,804.73, respectively. Companies and other interests in the agricultural sector got access to $13,714,552.83 for the period, while entities in the aviation sector received $10,313,648.29 for the same period.

Further breakdown showed that finished goods and others got allotments of $43,838,044.04 and$10,795,488.92, respectively. Invisibles, comprising of school fees, students’ upkeep and medicals, among others, received $191,335,087.10 or 22.05 per cent of the figure.

Meanwhile, the apex lender statistics showed that the local currency of N1.9 trillion was in circulation for month of November.

Our correspondent findings also show that the N1.9 trillion reported by CBN was the highest naira in circulation in 2016.

The amount of Naira in circulation, according to CBN, in November increased by 4.5 per cent from N1.8 trillion reported by CBN in October according to data collected by our correspondent, the currency in circulation early in the year was N1.7 trillion but dropped by 0.78 percent to N1.7 trillion in February.

Currency in circulation, according to CBN data, stood at N1.86 trillion in March, the second highest Naira in circulation. In April, the figure fell by 2.6 percent to N1.76trillion and closed May and June at N1.75 trillion and N1.68 trillion respectively.

Further investigation also revealed that currency in circulation remained flat at N1.66 trillion and N1.68 trillion in July and August respectively.

Commenting on the external reserves data, the Acting Director, Corporate Communications Department, CBN, Isaac Okorafor, said the release of the figures underscored the transparency of the bank in foreign exchange management.

It would be recalled that in September 2016, manufacturing industries in Nigeria were given access to foreign exchange valued at over $660 million in the inter-bank market to source for raw materials and spare parts.

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