By Adeleye Kunle
Nigeria’s external reserves have increased by $923 million in the last four weeks, reversing a several-month decline, Track News reports.
It had steadily declined to $38.421 billion on June 6th, 2022 from $40.52 billion at the end of December 2021, a loss of N2.1 billion or 5.1%.
While analysts at Cowry Asset Management Limited attribute the increase in reserves to the recent rally in crude oil prices and proceeds from the recently listed $1.25 billion FGN Eurobond issued in March 2022, they also cite recent CBN policy measures to boost dollar inflows as factors that will sustain reserve accretion in the long term.
“Nigeria’s gross external reserves are on the rise back to $40 billion after falling to a six-month low of around $38 billion at the start of the year,” they said.
“Currently, the positive rally seen in the crude oil market since the beginning of 2022 is starting to permeate the economy, spurring bullishness in external reserves.”
“In a similar vein, we can attribute the recent announcement by the Debt Management Office (DMO) that proceeds from its recently listed $1.25 billion FGN Eurobond issued in March 2022 on the NGX and FMDQ Exchanges, respectively, were used to finance capital projects and contributed to the increase in Nigeria’s external reserves,” they said.
“We believe that the prudent implementation of the CBN’s ‘RT200 FX Scheme,’ as well as the continued incentivization of international money transfer operators (IMTOs) through the ‘Naira4Dollar Scheme’ policy on FX repatriation, will help attract inflows of foreign exchange into the economy in the long run.”
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