CBN’s policies boost external reserves by $1.87m, surpassing $33.95bn amidst global economic turmoil
By Sodiq Adelakun
Nigeria’s external reserves experienced a slight uptick of $1.87 million, thanks to the policies implemented by the Central Bank of Nigeria (CBN) aimed at stabilising the foreign exchange market.
This marginal increase of 0.005 percent brought the external reserves to a total of $33.95 billion, marking a positive turn amidst global economic challenges.
Analysts attribute this increase to a combination of factors, including inflows from the diaspora and a steady rise in global oil prices. The news of the Nigerian National Petroleum Company Limited’s (NNPC) $3 billion ‘emergency loan’ from Afrexim Bank may have also contributed to bolstering the external reserves in August.
During the month of August, the CBN reported that the export crude oil price stood at $91.8 per barrel, representing a 4.34 per cent increase from the previous month’s closing price of $87.98 per barrel.
This figure is the highest export crude oil price since November 17, 2022, when it reached $93.41 per barrel.
However, it is important to note that the external reserves depreciated by $3.13 billion in the first eight months of 2023, despite the CBN’s interventions in the foreign exchange market.
The external reserves opened the year at $37.082 billion and ended August 31, 2023, at $33.954 billion. With the foreign reserves standing at $33.95 billion as of August 31, 2023, the Naira at the Investors & Exporters (I & E) Foreign Exchange market closed the month at N757.023 against the dollar, a slight decrease from the previous month’s closing rate of N757.52 against the dollar.
However, the local currency did gain 0.07 per cent against the dollar at the I & E FX window in August. It is worth noting that the local currency at the specialised window for investors and exporters has depreciated by 69 per cent in the first eight months of the year, compared to its closing rate of N448.55 against the dollar in 2022.
The marginal increase in Nigeria’s external reserves in August provides a glimmer of hope amidst the challenges faced by the global economy.
The CBN’s policies, combined with factors such as diaspora inflows and rising oil prices, have contributed to this positive development.
However, the overall depreciation of the external reserves in 2023 highlights the need for continued efforts to stabilise the foreign exchange market and strengthen the country’s economic resilience.
