Foreign reserves add $9bn in H1

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Stories by Kayode Tokede

The nation’s foreign reserves gained estimated $9billion in first half of 2018 and added $183 million in June, data gathered by Nigerian NewsDirect from the Central Bank of Nigeria (CBN) has shown.

The foreign reserves closed June at $47.8billion from $47.6 billion it opened.

Similarly, the nation’s foreign reserves monitored by CBN added $9 billion from $38.7 billion it opened this year to $47.8billion as at June 29, 2018.

According to Nigerian NewsDirect findings, the foreign reserves have been hovering around $47 billion since April 17, 2018 and reached the peak of about $47.85 billion on May 9, 2018.

The global oil prices also have been hovering around $70 per barrel, stoking hopes in the industry that the market has finally turned a corner following a three-year slump.

The Governor of CBN, Mr. Godwin Emefiele, had, predicted that the nation’s foreign reserves would soon hit $50 billion mark.

The naira buffer has come under heavy pressure, forcing the CBN to woo local businesses importing goods from China to use the yuan instead of the Dollar in its effort to support the naira and boost reserves.

The apex bank explained that the currency swap is aimed at providing adequate local currency liquidity to Nigerian and Chinese industrialists and other businesses thereby reducing the difficulties encountered in the search of third currencies.

Speaking with our correspondent recently, the Associate Professor and Head, Banking & Finance department Nasarawa State University, Mr. Uche Uwaleke, said the currency swap, “will improve Nigerian economy.

“When we talk about our reserves today, it is composed of Dollar. It means that we are over dependent on one currency and something happened, then our reserves in danger.

“The currency swap will diversify foreign exchange management by CBN. it is going to boost foreign reserves, appreciate the Naira because the pressure on Dollar will reduce.”

He said the currency swap in short-mid term will impact positively on the nation’s economy.

“The swap is going to last for two years but renewable,” he said.

He explained further that with the agreement, Chinese investors might be compelled by federal government to come and establish manufacturing companies in Nigeria.

He said, “If that happens, it is going to create jobs and increase production. I see more of Chinese companies producing in Nigeria and that again is expected to grow our GDP. By the time we fix power, road and security that will encourage Chinese investors to invest in Nigerian economy. For the two countries, it is a win-win situation.”

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