External reserves gain $679.12m in one month

Nigeria’s external reserves returned to a growth path after gaining $679.12million in June.

Figures obtained from the Central Bank of Nigeria revealed that the reserves, which stood at $38.48billion as of June 2, 2022, rose to $39.16billion as of the end of June 30, 2022.

The reserves had earlier hit a seven-month low after falling to $38.4billion as of the end of May.

Analysts at Cordros Research stated that Nigeria’s FX reserves maintained accretion for the fifth consecutive week as the gross reserves position grew.

“Hence, we think (1) further adjustments in the NGN/USD peg closer to its fair value and (2) flexibility in the exchange rate would be significant in attracting foreign inflows back to the market.”

A member of the Monetary Policy Committee meeting, Mike Obadan, at the last meeting had said, “A hiked Monetary Policy Rate could douse the demand pressures in the foreign exchange market and may also spur desired capital inflows/stem outflows as well as boost external reserves.”

According to him, the Nigerian economy had continued to exhibit features which would make monetary policy choices difficult for the policy makers, and in particular, the monetary authority.

Two of these features, he said, were fragile economic growth and escalating inflation.

Others, he added, were high, unstable exchange rate and uncomfortable external reserves levels.

The CBN Governor, Godwin Emefiele, had said to boost forex supply in the country through the non-oil sector in the next three to five years, it had launched the ‘RT200 FX Programme.’