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Nigeria’s Fx Reserves Hits $25.2bn As Dollar Shortage Bites

External reserves rose to $25.2bn on December 19, statistics revealed.

The Nigeria’s forex reserves have risen to over three-month high of $25bn, according to data on the website of the Central Bank of Nigeria.

The last time the reserves recorded this figure was on September 8 when it had the balance of $25.16bn.
The CBN data showed that the foreign exchange reserves declined to $24.92bn on September 14 from $25.11bn on September 9.

Experts however, said they are not sure how sustainable the rise in the external reserves’ level would be amid the falling naira and acute shortage of dollar in the foreign exchange markets.

“We are not certain of the extent this can go. Currently, the FX market is not a free-float one where the interplay of demand and supply determines price and volume. The uptick in the external reserves is not as a result of increase in supply over demand. It happens when there is a slowdown in the allocation of FX,” the Chief Executive Officer, Cowry Asset Management Limited, Mr. Johnson Chukwu, said.

“The gradual accretion of the external reserves could only become sustainable if the global oil price maintained its current level and there was also a continuous ramp up in oil production,” a senior associate in investment banking at Afrinvest, a research and investment firm, Mr. Ayodeji Ebo, had said.

At the end of November, the reserves stood at $24.77bn, up from $23.95bn on October 31.

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