Jitters as the CBN fails to update external reserves figures in 10 days

All eyes are on the Central Bank of Nigeria (CBN) for the release of the latest foreign exchange reserve figures. The apex bank is yet to update the most recent figures on its website for over two weeks, the last being August 18 2017. The external reserves data is updated nearly every day.

The apex bank has spent about $972 million defending the Naira so far this month, but the rate has continued to dip due demand for foreign exchange for summer trips and school fees.

A higher reserves could send positive signals to foreign investors, especially those who are still apprehensive about investing in the country. However, a lower reserves could imply that the CBN is burning more cash than it’s taking in, signaling that there could be pressures on the exchange rate in the coming weeks.

A total of $195 million was sold by the Central Bank of Nigeria (CBN) last week out of which $100 million was sold to the wholesale market. About $50 million was sold to SME’s while $45 million was sold to banks to settle invisible transactions. Invisible transactions include school fees, Personal Travel Allowance (PTA), Basic Travel Allowance (BTA) and Medicals.

The Naira depreciated by 10 kobo opening the week at N305.70 and closing at N305.80 at the CBN official window. At the NAFEX window, the Naira appreciated by 1.23% opening at N360.66 last Monday and closing at N359.25 on Friday. Parallel markets remained flat during the week closing at N370.

The National Bureau of Statistics (NBS) last week released the Capital Importation report for the second quarter ended June 2017. Capital imported into the country increased by 95% from $884.1 million in Q1 to $1.79 billion in Q2. Porfolio investments accounted for 43% of the funds, other investments accounted for 41.7% and Foreign Direct Investment accounted for 15.3%.
Most recent figures from the CBN website, put the country’s reserves at $31.5 billion.