• Thursday, May 23, 2024
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External reserves rise by $16.36m as naira remains stable


Nigeria’s external reserves increased by $16.36 million week-on-week to $35.69 billion as foreign exchange inflows improve.

FX inflows more than offset outflows from the Central Bank of Nigeria (CBN)’s interventions across the various FX windows.

External Reserves have maintained a stable trend at US$35.7 billion in the month of September and October 2020 according to FSDH research.

Relatively stable crude oil prices and output has also improved dollar inflows into the foreign exchange market.

Nigeria’s currency has over the past two weeks remained stable at between N460 and N461 on the black market.

At the Bureau De Change (BDC) segment of the foreign exchange market, naira weakened by N1.00k as the dollar closed at N462 on Monday as against N461 on Friday.

Over 5,000 BDC operators across the country funded their accounts on Monday in anticipation for dollar disbursement by the Central Bank on Tuesday.

The foreign exchange market has been under pressure since March 2020 following a sharp drop in oil prices as a result of Covid-19 pandemic.

At the Investors and Exporters (I&E) forex window, Naira appreciated by 0.10 percent as the dollar was quoted at N385.63 as against N386.00 on Friday. Analysts at FSDH said most participants maintained bids between N383.00 and N393.44 per dollar.

Earlier, the market opened with an indicative rate of N386.25k on Monday, which represented N0.38k appreciation over N386.63k opened with on Friday.

The foreign exchange daily turnover declined by 51.48 percent to $104.20 million on Monday from $214.78 million recorded on Friday at the I&E window, data from FMDQ show.

At the money market on Monday, the Nigeria treasury bills secondary market closed on a positive note with average yield across the curve declining by 2 bps to close at 0.52 percent from 0.54 percent on Friday. The average yield across long-term maturities compressed by 4 bps due to the maximum buying interest witnessed in the NTB 16-Sep-21 (-32 bps) maturity bill.

However, average yields across short-term and medium-term maturities remained unchanged at 0.37 percent and 0.85 percent, respectively.

The Overnight (O/N) rate declined by 0.25 percent to close at 1.00 percent from 1.25 percent on Friday, and the Open Buy Back (OBB) rate also declined by 0.25 percent to close at 0.75 percent as against the last close of 1.00 percent.

“We expect the money market rates to remain low at single-digit levels due to abundant liquidity in the system,” the analysts said on Monday.