The nation’s foreign exchange reserves have increased to a six-month high of $44.14bn, data obtained from the Central Bank of Nigeria on Thursday showed.
The external reserves have gained over $1.8bn since February 28, when it dropped to its 2019 low of $42.296bn.
The reserves, which rose slightly from $43.116bn on December 31, 2018, to $43.174bn on January 31, 2019, fell to $42.296bn at the end of last month.
The external reserves had risen to a high of $47.865bn on May 10, 2018, but plunged to $41.523bn on November 22 from $44.305bn on September 28.
Analysts at Cordros Capital said last Friday that for the third consecutive week, the CBN recorded another forex reserve build-up.
They said, “Specifically, the apex bank recorded foreign reserve accretion of $456.67m week-on-week to $43.51bn. Meanwhile, in the face of the CBN’s pause on its weekly forex intervention, naira depreciated marginally by 0.07 per cent to $360.43 at the Investors’ and Exporters’ window and by 0.28 per cent to N360 and in the parallel segment.
“Elsewhere, total turnover at the I&E window moderated by 26.54 per cent to $1.20bn with 58.18 per cent of trades executed within the N360-369/USD band. Similar to the spot market, the naira depreciated across all contracts at the forwards market -one-month (-0.12 per cent to N362.78), three-month (-0.21 per cent to N369.78), six-month (-0.06 per cent to N381.53), and one-year (-0.41 per cent to N403.32).”
The analysts added, “Looking ahead, we expect the naira to remain firm in the medium to short term, as the still elevated crude price rally continues to underpin higher oil receipts, thereby supporting the CBN’s continued intervention. In addition, the recent deluge of portfolio inflow further supports our view of currency stability.”
Meanwhile, the United States’ President, Donald Trump, on Thursday, called for the Organisation of the Petroleum Exporting Countries to boost oil production to lower the price of the commodity.
“[it is] very important that OPEC increase the flow of oil. World markets are fragile; price of oil getting too high. Thank you!” Trump wrote in a post on Twitter.
Immediately, following Trump’s tweet, the US crude oil futures fell by more than $1 to $58.33 a barrel and Brent futures were down by more than $1 to a session low of $66.76 per barrel, according to Reuters.
Crude oil prices have risen this year amid supply cuts by OPEC as well as US sanctions on two OPEC member countries, Venezuela and Iran. The drop in production has led to a tightening of oil inventories.
But analysts said oil prices would have been higher by now if not for a spreading economic slowdown expected to soon start hitting fuel consumption.