Reserves rise by $318 million in one week, hit $24.8 billion

The nation’s foreign exchange (forex) reserves have sustained an incremental record in the last five weeks, despite demand pressure, as it added $318 million in seven days.

The increase, now bring the stock of reserves to $24.82 billion, up from $24.49 billion one week ago, representing about 1.3 per cent rise.

The resurging reserves’ trend came despite $1.5 million daily dollar sales throughout in the last one week, according to analysts, which they said has broadly stabilized the interbank market.

Meanwhile, forex sales to banks at the interbank market last week, oscillated between N304.5/$ and N305/$ until Friday, while at the parallel market however, the local unit continued to trade with significant spread.

As at Friday, due to supply constraints the naira closed at N482/$ at the parallel market, compared to N475/$ at the beginning of the week, depreciating 1.5 per cent week-on-week.

The reserves rose by 3.3 per cent in November to $24.7 billion, before adding about $182 million as at December 1, from $23.9 billion in October.

“We believe this is positive for the capacity of the Central Bank of Nigeria to sustain its daily dollar sales, even as the recent output deal reached by oil cartel members signals further improvement.

“However, unresolved crisis in the Niger-Delta remains a drag to accretion. We expect interbank market rate to remain largely stable in the coming week as the CBN continues its daily $1.5 million forex sales to banks,” analysts at Afrinvest Securities Limited said.

The international price of crude oil has remained relatively stable in recent weeks, although the country’s production has been below expectation due to the activities of militants.

However, the price stability, slight improvement in capital importation and the country’s management of the foreign exchange policy through the Central Bank of Nigeria have also contributed to the assessed reserves’ accretion.

The National Bureau of Statistics (NBS), in its latest report, said the trade deficit is now N104.14 billion, from N484.23 billion in the previous quarter, as the rise in exports moved to $1.59 billion from $342.5 million.

Earlier in November, African Development Bank delivered a $600 million facility, out of the $1 billion it pledged to Nigeria, which may have aided the reserves recovery.