PRESIDENT BUHARI ARRIVED FROM QATAR 0A President Muhammadu Buhari on his Arrival from Qatar and Saudi Arabi with Parade of gaurds at the Nnnamdi Azikwe International after his official visit to Qatar and Saudi Arabi in Abuja.
By Emeka Anaeto, Economy Editor
LAGOS — With approximately $100 million accretion to foreign reserves in the past three weeks, the nation’s currency, naira, appears to be on stable part, though not reversing its huge losses since this year.
Ahead of its worst crash to an all time low of N400/$ in the second week of February, the reserves had been on steady decline to a low of $27.112 billion but as at last weekend the reserves had gone up to $27.212 billion.
Consequently, the naira had firmed up, closing at average of N317/$ in the parallel market segment last weekend with a three-week average rate of N321/$ as against N350/$ in the first three weeks of February.
In the official window controlled by the Central Bank of Nigeria, CBN, the rate has remained stable for several months, now at about N199.1/$ interbank rate.
Analysts and foreign exchange dealers in banks have attributed the stability in the parallel market to positive developments in the foreign reserves which was in turn due to similar developments in the international oil market, resulting in some increases in the foreign exchange inflow.
However, a few dealers were still skeptical about the seeming growth in reserves and the resultant stability in the foreign exchange market as they suspected it is contrived by the apex bank’s demand management and under-supply of the market.
Also, parallel market dealers said there had been significant drop in the volume of patronage they receive probably because of harsh economic situation.
According to analysts at FBN Merchant Bank, an arm of FirstBank of Nigeria Plc, the slower rate of reserves depletion could mean any or combination of these three occurrences: “that foreign exchange sales by the CBN slowed, that it (CBN) was able to plug some leakages or that it saw a modest increase in its receipts/inflows.
“We cannot be sure of the first explanation since the CBN stopped publishing data for successful bids in 2012, we hope that the second was relevant and we are confident of the third now that oil prices have recovered from their recent low.”
Reserves at end-February provided 6.2 months’ cover for annual merchandise imports and 4.4 months when services are added.
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