Connect with us
Paramount
Advertisement
Ican
Advertisement
IZIKJON
Advertisement
Stanbic IBTC
Advertisement
Polaris bank
Advertisement
Binance
Advertisement
Esetech
Advertisement
Patricia
Advertisement
Fidelity ads
Advertisement
app

Business News

Nigeria’s foreign reserves hit $36.57 billion; Emefiele keeps his word on defending the naira

Nigeria’s foreign exchange reserves now stand at $36.57 billion, having increased sharply from $33.42 billion as of April 29, 2020.

Published

on

diaspora remittances, Total credit to the economy rose to N19.54trillion – CBN Governor, CRR debits, P-AADS, #EndSARS: CBN says funds in frozen accounts may be linked to terrorist activities, Covid-19: Court closures impacted revenue generation for courts - Emefiele, P&ID dispute: UK Court orders $200 million guarantee to FG, Leaked letter by Poultry Farmers Association triggered CBN emergency approval to import maize, nImplications of CBN's latest devaluation and FX unification, current account deficit, IMF, COVID-19, CBN OMO ban could give stocks a much-needed boost , CBN’s N132.56 billion T-bills auction records oversubscription by 327% , Nigeria pays $1.09 billion to service external debt in 9 months , Implications of the new CBN stance on treasury bill sale to individuals, Digital technology and blockchain altering conventional banking models - Emefiele  , Increasing food prices might erase chances of CBN cutting interest rate   , Customer complaint against excess/unauthorized charges hits 1, 612 - CBN , CBN moves to reduce cassava derivatives import worth $600 million  , Invest in infrastructural development - CBN Governor admonishes investors , Credit to government declines, as Credit to private sector hits N25.8 trillion, CBN sets N10 billion minimum capital for Mortgage firms, CBN sets N10 billion minimum capital for Mortgage firms , Why you should be worried about the latest drop in external reserves, CBN, Alert: CBN issues N847.4 billion treasury bills for Q1 2020 , PMI: Nigeria’s manufacturing sector gains momentum in November, CBN warns high foreign credits could collapse Nigeria’s economy, predicts high poverty, MPC Member, BVN, Fitch, Foreign excchange (Forex), Overnight rates crash after CBN’s N1.4 trillion deduction, Nigeria’s foreign reserves hit $36.57 billion; Emefiele keeps his word on defending the naira, CBN to support maize farmers, projects 12.5 million metric tons in 18 months, BREAKING: CBN Upscales Greenwich Trust Limited, grants it's operational license for merchant banking, AGSMEIS: CBN expand beneficiaries to 14,638., CBN expands access to mortgage financing

The macro fundamentals surrounding Nigeria’s major export, including the recent jump in crude oil prices to about $40, seem to have helped Nigeria’s foreign reserve to rise at a steady pace.

According to the latest data obtained from the Central Bank of Nigeria (CBN), Nigeria’s foreign exchange reserves now stand at $36.57 billion, having increased sharply from $33.42 billion as of April 29, 2020. This shows a gain of $3.15 billion dollars in 33 days.

What you need to know about Nigeria’s foreign reserves

Foreign exchange reserves are financial assets held in reserve by CBN in foreign-dominated assets. These foreign financial dominated reserves are used to meet payment or debt obligations. They also influence monetary policies and include foreign-dominated currencies, foreign-dominated bonds, and other International backed securities. 

This feat recorded above (rising FX reserves) has given the CBN Governor, Godwin Emefiele, more ammunition to defend the naira.

(READ MORE: Investors cash in N1.2 trillion at Nigeria’s stock market for the month of May)

Also, the macro fundamental of Nigeria’s currency presently shows that Mr. Emefiele has kept his word on hitting currency speculators hard.

The naira has been stable in the short term, even though data obtained from Everdon Bureau de Change showed that the currency had failed to break the resistance price level of N450 to $1 in the last 6 days in Nigeria’s parallel market.

Weeks ago, the naira traded as high as N475 to $1. However, on Thursday morning it was sold at N446 to $, proving that Nigeria’s monetary captain is bent on stabilizing the currency for the long haul. Recall that the CBN Governor had warned currency speculators and hoarders to stop manipulating Nigeria’s exchange rates. He also recommended that Nigerians should stop patronizing black market currency operators. According to him, the rates they are buying the dollar from the black market are unrealistic.

(READ MORE:Naira strenghtens further at the parallel market)

In addition, Nigeria’s central bank recently re-started the weekly dollar sales of $100 million for small businesses and individuals who are in genuine need of foreign exchange.

Philip Anegbe, Team Lead at CardinalStone Research, had recently told Nairametrics that the pressure on the naira would ease off soon. He said:

“I believe some of the recent pressures on FX is driven by speculators’ panic responses to weakness in dollar earnings, the decline in FX inflow through the I and E window, and suspension of dollar sales to BDCs (Bureau De Change operators). 

“The imminent resumption of BDC activities is therefore likely to slightly ease Naira pressures in the parallel markets, but we believe the underlying medium-term fundamental concerns facing the Naira still remain.”

bitcoin train

Binance

Olumide Adesina is a France-born Nigerian. He is a Certified Investment Trader, with more than 15 years of working expertise in Investment trading. Follow Olumide on Twitter @tokunboadesina. He is a Member of the Chartered Financial Analyst Society.

1 Comment

1 Comment

  1. Kigali

    June 5, 2020 at 1:01 pm

    Who cares? Of which impact is it to the common people suffering in the hands of most commercial banks daily to access quality financial services nonetheless CBN has failed to effect discipline in activities of commercial banks.

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Advertisement




Advertisement

Nairametrics | Company Earnings