Nigeria’s Gross External Reserves Top $53bn, Highest Since 2008
Nigeria’s gross external reserves topped $53 billion, driven by sustained FX inflows from sources including hydrocarbon sales and remittances- the highest seen since 2008.
The total amount credited to the nation’s foreign reserves expanded to $53.112 billion, up from $52.832 billion previously reported by the Apex Bank, following additional inflows of $280 million.
FX inflows continue to flood Nigeria’s financial markets due to attractive yields on fixed-income securities and limited direct bets on the local economy, particularly in manufacturing.
While the hot money remains intact, the naira has been relatively stable and has already beaten the year-end projection of N1350, which was common early in the year,
A slew of analysts maintained that the naira is unlikely to face significant pressure that could erode its strength against the dollar following the FX reform and the settlement of the backlog.
With more than $40 billion in net external reserves, the authority has created an additional support system for the naira should the January event repeat itself.
US launched new tariffs, which had stoked pressure on foreign portfolio investment, resulting in massive asset selloffs. Nigeria intervened in the forex market to keep the naira stable and avoid undue pressure relative to the pre-reform era.
Market confidence remains solid, with additional support from the country’s strong external buffer; some analysts have expressed the view that the local unit may be undervalued after all.
Data from the Central Bank of Nigeria (CBN) showed that the exchange rate closed at N1343 per US dollar at the official window, down from N1346 quoted on Monday.
Overnight Rate Dips as T-Bill Inflow Boosts Market Liquidity
