The Central Bank of Nigeria (CBN) has disclosed that the foreign reserves in one month dropped by $81.8million or 0.18per cent to $44.99 billion as art July 26,2019 from $45.07 billion reported in June 26,2019.
Our correspondent gathered that CBN’s debt services contributed to the decline in foreign reserves, coupled with the apex bank intervention in the foreign exchange market.
The nation’s foreign reserves in Year-Till-Date (YTD) performance gained $1.87 billion or 4.35 per cent when it opened the year at $43.12billion.
Analysts have said, the steady growth in global oil prices has impacted on foreign reserves increase this year, stressing that capital inflow before and after the 2019 general election also a key factor to acceleration in the foreign exchange buffer.
Our correspondent gathered that the global oil price between January and June this has appreciated by 25.8 per cent or $13.46 to $65.60 per barrel from $52.14 per barrel it opened this year.
The exchange buffer in first quarter of 2019 gained $1.3 billion or 3.04 per cent from $43.12 billion to $44.43 billion and further increased by $641.4 million or 1.4 per cent in second quarter to $45.07billion.
The Governor, CBN, Mr. Godwin Emefiele, in its 5-year policy thrust (2019-2024) stated that, the creation of Investors and Exporters Window which allowed exporters and investors inflow into the country, restricted access to external exchange on 43 items, among others helped to accrete external reserves.
According to him, “these measures helped to support the attainment of our monetary policy objectives such as a reduction in the inflation rate, stability in our exchange rate and improved accretion to our external reserves.”
However, the increase in external reserves is coming on the backdrop of National Bureau of Statistics (NBS) report of 95.02 per cent increase in investment inflows into the country from $884.1million in the first quarter of this year to $1.79billion in the second quarter of 2019.
The bureau attributed the main driver of the quarterly growth in capital importation in the second quarter to 146.7 per cent increase in Portfolio Investments.
The NBS increase in Portfolio investment was followed by Other Investments, which grew by 95.02 per cent, and then foreign Direct Investment, which increased by 29.8 per cent over the previous quarter.
The report stated that United Kingdom emerged as the top source of capital investment in Nigeria in Q1 2019 with $4.5 billion.
“This accounted for 53.40per cent of the total capital inflow in Q1 2019,” NBS in its capital importation report disclosed.
Other leading countries include, $1.5 billion capital importation from United States and $240.56million import from Belgium.
Analysts at GTI securities noted that, “ Barring any sudden interest rate hike in the US, we expect capital importation into Nigeria to remain firm in the remaining quarters of the year due to the attractive yield environment and the relative stability in the external reserves market.”