Nigeria’s external reserves decline by 0.052% to $38.32bn mid January
Nigeria’s external reserves fell 0.052 per cent by January 16, 220 after gaining 0.078 per cent between Jan 13 to 15, 2020 when they moved from $38.31 billion to $38.34 billion.
The FX buffer had initially gained 0.026 per cent, which was its first increase in six months and in the new year.
According to the data from the Central Bank of Nigeria (CBN), the nation’s forex buffer slipped to $38.32 billion by January 16, from $38.34 billion on January 15, 2020.
Analysts had seen the initial increase recorded in the volume of the country’s external twice this year as a positive signal that could impact the stability of the local currency.
The reserves first moved up from $38.31 billion on Jan. 13, 2020 to $38.32 billion by Jan. 14 and then increased further to $38.34 billion by Jan 15.
The forex buffer rose 0.078 percent in three days from Jan. 13 to 15, 2020 before it started another round of decline by Jan. 16 when it fell to $38.32 billion.
The country’s forex buffer has been on the downward slope since last year when it peaked at $45.14 billion on July 5, from $45.11 billion on July 4, 2019.
The reserves started the year at $38.53 billion, which means they have declined by 0.54 percent this year alone.
CBN Monetary Policy Committee (MPC) is expected to meet this Thursday and Friday to determine the interest rate in relation to the macro-economic conditions prevailing in the country.
Nigeria’s inflation inched up to 11.98 percent in December, higher than the 11.85 percent rate recorded in November 2019, sparking concerns that the MPC may continue to hold its benchmark rate at the present 13.5 percent or tighten liquidity to curb speculation on the local currency.
The local currency strengthened at the CBN Official window, appreciating by two basis points to close on Friday at N306.9 to the dollar.
At the I & E FX window, the rate appreciated by 21 bps to N361.84 per dollar, while it stayed firm at the parallel market at 362 per dollar.
-Global Financial Digest
