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Nigeria’s foreign reserves fall to 6-weeks low, lose $81.10 million

Nigeria’s foreign reserves depleted to 6 weeks low in July. This is reflected in the latest data released by the Central Bank of  Nigeria (CBN) on its website.

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Nigeria’s foreign reserves depleted to 6 weeks low in July. This is reflected in the latest data released by the Central Bank of Nigeria (CBN) on its website.

According to the CBN’s data, Nigeria’s gross foreign reserves currently stand at $45.09 billion, from the estimated value of $45.17 billion on the 10th of June 2019, representing almost two months low. Within the period, total reserves inched down by $81.10 million.

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Nigeria’s reserves: Nigeria’s foreign reserves crossed the $45 billion thresholds in May 2019. Hence, the reserves had continued building up until the recent decline.

  • Nairametrics reported in May, that the external reserves increased by $212.2 million to hit $45 billion mark.
  • In June 2019, Nigeria’s external reserves increased by $155.6 million.
  • The reserves posted in June marked a 35% point increase within a period of three weeks in 2019. This is the highest figure posted so far in 2019.
  • The recent decline means foreign reserves maintain a free fall.

Nigeria’s External Reserves Moving Average on the CBN website

[READ: Nigeria’s External Reserves hit $45bn mark]

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Reasons for the fall:  Essentially, Nigeria’s foreign reserves have improved in recent months when the gross value hit $45 billion. Meanwhile, the reserves have fluctuated in recent weeks, and this may partly border on the movements in prices of oil, due to the sustained tension in the Middle East and the U.S/China trade war.

  • Other factors responsible maybe the slow down in the capital market and possibly CBN interventions in the Investors and Exporters’ window (I&E).
  • Recently, while delivering a lecture at the University of Benin, the CBN Governor, Godwin Emefiele, disclosed that the introduction of the Investors and Exporters’ window had helped in shoring up the country’s external reserves.

“We have seen the reserves moving up but unfortunately, we still have issues and those issues border on the unemployment rate and those issues border on how we prepare our country.

“The turnover in the I&E FX Window had reached over $48bn since the inception of the window and that the nation’s foreign exchange reserves had risen to $45bn in April 2019 from $23bn in October 2016.”

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CBN sets N650,000 as accreditation fee for personalised cheques

CBN Governor, Godwin Emefiele

Why building reserves matters: While recently reeling out the CBN’s 5-year plan, Mr. Emefiele disclosed that the apex bank was committed to stabilizing the Exchange Rate and building the country’s reserves through a coordinated policy approach.

“We will also work with our counterparts in the fiscal arm in supporting improved FDI flows to various sectors, such as agriculture, manufacturing, insurance, and infrastructure. These measures while supporting improved inflows into the country will help to stabilize our exchange rate and build our external reserves.”

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  • One of the ways the CBN has been able to maintain Naira stability, in recent months, was by drawing from the reserves to defend the currency.
  • The CBN builds reserve buffers and periodically uses it to intervene in the currency exchange market, to prevent the value of Naira from depreciating.
  • The apex bank has made clear its resolve to maintain a stable exchange rate, while building external reserves on the side.

CBN’s next move: The CBN Governor recently listed the conditions that could warrant him to devalue the Naira. He made this disclosure at the African Investors’ Conference (AIC) which took place in London from June 25 to 27.

  • According to Emefiele, the CBN could consider devaluing the exchange rate if the price of crude falls to between $50-$45, which means depleting reserves.
  • The Governor also mentioned that if this happens and the reserves drop to between $30 billion and $25 billion, the CBN could consider moving on the exchange rate.

In the meantime, the reserves stock at the current estimate is able to finance nine months of Nigeria’s current import commitments and this means the economy is relatively viable.

[READ FURTHER: This is when I will devalue the naira]

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Patricia

Samuel is an Analyst with over 5 years experience. Connect with him via his twitter handle

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Coronavirus

Former Liberian President to sit on WHO review panel of COVID-19 response effort

Ellen Sirleaf has been picked alongside Helen Clark, to serve as co-chairs of the independent panel.

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Former Liberian President to sit on WHO review panel of Covid-19 response effort

Following stern criticism by US President, Donald Trump, over their handling of the COVID-19 response efforts, the World Health Organization (WHO) has announced it will implement an independent panel to review said response efforts to the pandemic.

To this end, Liberia’s former President and West Africa’s first female President, Ellen Johnson Sirleaf, has been picked alongside former Prime Minister of New Zealand, Helen Clark, to serve as co-chairs of the independent panel. They will be responsible for selecting the other members of the panel, according to the WHO.

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WHO’s Director-General, Tedros Adhanom, announced the panel will produce an interim report in a November meeting of global health ministers. Meanwhile, the substantive report would be produced by May 2021.

Tedros also said that the size of the pandemic calls for the need for a “commensurate evaluation, an honest evaluation”, adding that the WHO would be very serious with the preparation of the report.

READ MORE:COVID-19: WHO warns worst is yet to come as firm charges $2,340 for virus treatment

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The WHO members in May agreed to an independent review of the organization’s response to the pandemic. Ellen Johnson Sirleaf said the review of the body’s response would be challenging but looks forward to her role in doing what she can contribute to the response of the pandemic’s challenges.

The panel will also report monthly updates on the body’s response and will not only review the WHO’s response but also the International community’s response. Tedros added that it’s time for an honest reflection on the global response, saying a response will help with lessons on the pandemic.

 

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Economy & Politics

Presidency dismisses allegation of Osinbajo receiving N4 billion from recovered loots

The accusation was described to be an obvious campaign of lies and calumny.

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Twitter deactivate Yemi Osinbajo's Twitter account, How Nigeria's LPG sector can create 2 million jobs -Osinbajo, budget support, NEC okays $250 million investment in NSIA , MSMEClinic gets 200,000 capacity yam storage facility in Benue, Accusations of Yemi Osinbajo receiving N4 Billion from recovered loots are baseless- Presidency

The office of the Vice President has reacted to a series of tweets accusing Professor Yemi Osinbajo of instructing the embattled acting Chairman of the EFCC, Ibrahim Magu, to release the sum of N4 billion out of N39 billion that was recovered from alleged looters. 

These allegations have been described as “false and baseless”. 

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READ ALSO: UPDATE: President Buhari appoints Prof. Gambari as new Chief of Staff

A statement that was signed by the Senior Special Assistant to the Vice President on Media and Publicity, Laolu Akande, said, with all emphasis at our disposal, let it be firmly stated that these are totally false and baseless fabrications purposing to reflect goings-on at the probe panel investigating Mr Ibrahim Magu”. 

Ibrahim Magu was relieved of his duties this week, after a probe was conducted on his activities as Acting Chairman of the nation’s anti-graft agency. He has since been replaced with Mohammed Umar. 

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READ MORE: Just In: DSS invites EFCC’s Acting Chairman, Ibrahim Magu for questioning)

Meanwhile, the statement by the Presidency also complained about the recent rise in people being paid to “peddle blatant falsehoods” against the Vice President and says Mr Osinbajo “will not be distracted by these obvious campaigns of lies and calumny”. 

The statement added that the online publications “being criminally defamatory in nature”  have been referred to law enforcement agencies for investigation. 

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Explore economic research data from Nairametrics on Nairalytics

 

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Financial Services

Stanbic IBTC observes closed period, as directors set to consider H1 results

The directors will also consider a proposal to pay an interim dividend to shareholders.

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Stanbic IBTC

Stanbic IBTC Holdings Plc announced earlier today that its board of directors will meet on Wednesday, July 29, as part of preparations towards the release of the company’s consolidated and separate audited financial statements for half-year 2020. The directors will also consider a proposal to pay the company’s shareholders an interim dividend.

A statement issued by the Stanbic IBTC to the Nigerian Stock Exchange (NSE) noted that the scheduled board meeting is in tandem with guidelines contained in section 1.2 of the NSE’s rules book.

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In the meantime, the bank Hold-Co has already commenced observing its closed period ahead of the release of the half-year financial statements. Specifically, Stanbic IBTC began observing its closed period on June 1st, 2020, the implication being that all insiders and their relatives have been prohibited from trading the company’s shares for more than one month now.

Explore economic research data from Nairametrics on Nairalytics

Note that the Stanbic IBTC’s closed period will continue until the half-year financial statements are released. Part of the statement which was signed by Chidi Okezie (Company Secretary), said:

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“In accordance with the provisions of Section 1.2 of the Rules of The Nigerian Stock Exchange (The NSE) relating to Board Meetings and General Meetings of Issuers, we would like to notify The NSE and our Shareholders, that a meeting of the Board of Directors of Stanbic IBTC Holdings PLC (the Company) is scheduled to hold on Wednesday 29 July 2020 at 1:00 pm. The meeting will discuss amongst other items, the Company’s Consolidated and Separate Audited Financial Statements for the Half-year ended 30 June 2020 as well as a proposed interim dividend.

READ ALSO: COVID-19: NSE extends time for submission of audited financial statements

“In view of the above, the closed period for the release of half-year results, which commenced on Monday, 01 June 2020 will continue to be in effect until the release of the Company’s Half-year audited financial statements.”

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Recall that the last earnings report that was released by Stanbic IBTC Holdings Plc was for Q1 2020. The unaudited report showed that gross earnings stood at N61.4 billion as against N58.7 billion in Q1 2019, even though interest income for the period declined by 12% year on year to N27.5 billion. Meanwhile, profit for the period stood at N20.6 billion, an increase when compared to N19.2 billion in Q1 2019.

Stanbic IBTC Holdings’ share price closed at N30.25 at the end of today’s trading session on the Nigerian Stock Exchange. Year to date, the stock has declined by nearly -20%.

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