Nigeria’s External Reserves Hits $36b, Highest In 12 Months

By Fola James

Nigeria’s external reserve has risen to close to $36 billion according to latest figures released by the Central Bank of Nigeria, CBN last week.

The apex bank said at the week end that the reserves rose by $461 million to $35.834 billion, the highest in six months after it plunged to an all time low of $35 billion dollars for the most part of 2020.

Figures released by the Bank indicate that the reserves rose from $35.373 billion at the close of last year to $35.834 billion as at January 7, 202, the highest in 12 months..

Thus the reserves have recovered from the nine weeks decline of $847 million to $34.825 billion on December 17th from $35.672 billion in October.

For most part of 2020, the nation’s external reserves remain stuck at below $36 billion, as the country faced a foreign currency crisis that has led to multiple devaluations of the national currency (naira), three times before the end of the year.

The CBN devalued the naira in March, July, and in August 2020, in the midst of pressure from the World Bank for the unification of the exchange rate, which is now between N380 and N386/$1.

As a way out of the plunging reserves CBN resumed forex sales to BDCs, but the situation barely changed as the reserves remain stuck at $35 billion.

At the beginning of 2020 Nigeria’s Forex reserves stood at $38.5 billion but fell by over $2 billion to 436 billion within the first quarter, as the country was hit by the corona virus pandemic which ravaged the economy.

Meanwhile, analysts have adduced the increase to the rise in crude oil price in the international marker. Nigeria’s crude was sold for $50 per barrel as the close of business last week.