Nigeria’s external reserves edged higher to close at $48.174 billion on March 12, data obtained from the Central Bank of Nigeria (CBN) showed yesterday.

THISDAY also learnt that at its current value, the foreign reserves derived primarily from proceeds of crude oil earnings have improved by 8.65 per cent or by $3.837 billion this year, compared to the $44.337 billion at the beginning of the year.

The growth of the external reserves this year is largely influenced by high crude oil prices as well as the relative stability of the naira.
Oil prices climbed further yesterday following the release of stronger-than-forecast retail sales figures in the United States. For instance, on the New York Mercantile Exchange, light sweet crude futures for delivery in April traded at $93.03 a barrel, up by 0.5 per cent. Also, Brent oil closed at $109.31 a barrel.

Meanwhile, the naira slipped marginally against the dollar at both the Wholesale Dutch Auction System (WDAS) and interbank segment of the forex market yesterday. At the interbank market, the local currency fell by 40 kobo to close at N158.90 to a dollar as against the N158.50 to a dollar it closed the previous day.

On the other hand, at the WDAS, the local currency fell by one kobo to close at N155.76 to a dollar yesterday, lower than the N155.75 it was at the end of Monday’s auction.

In all, the CBN offered a total of $180 million to the 18 banks that participated in the auction. The apex bank had also offered same amount at Monday’s auction.

Financial market analysts at the Ecobank Group, Mr. Kunle Ezun and Kenneth Asenime, in a joint report, attributed the depreciation suffered by the naira to increased corporate demand to cover import bills and other forex obligations.

“Although the naira has a weakening outlook, the steady rise in reserves to around 10 months equivalent of imports provides a large cushion to support the naira in the weeks ahead. Over the short term, the naira will likely continue to trade on the interbank market within the CBN’s three per cent band either side of N155/$1. The CBN continues its liquidity management (through the sale of Open Market Operations bills) to ensure price stability,” they added.

The CBN Governor, Mallam Sanusi Lamido Sanusi, recently stressed the need to continue to build fiscal buffers because of what he termed “dark clouds in the horizon.”

He added: “We need to go into a period of strong and serious fiscal restraints and consolidation. We must continue to build up external reserves and protect the economy from external shocks.”

Source: Thisday (By Obinna Chima)