Naira Gains Amidst Questions Mark on FX Reserves

Naira Gains Amidst Questions Mark on FX Reserves

The Nigerian naira rallied across foreign currency markets amidst hanging questions market about external reserves’ true position. In the official market for investors and exporters, the 759.86 naira was exchanged for the United States (US) dollar.

The local currency was priced at N774.77 versus the greenback on the previous day, according to FX data from the FMDQ platform.  In the parallel market, the naira appreciated by 3.40% to N910 amidst concern about the nosediving oil market.

Brent crude fell 0.12% to $84.93 per barrel, while WTI crude lost 0.42% to $80.65 per barrel. 

Oil futures were slightly lower as bearish sentiment resulting from Chinese recession fears limited gains despite a larger-than-expected drop in US crude inventory.  There have been diverging views and estimates about the true position of Nigeria’s external reserves versus Central Bank figures for 2022. 

Two major investment banking firms in Nigeria have pushed out different figures – both are unfavourable but the question around it remains that there is no consensus in their estimates.

In its market update, Cordros Capital’s recalculation of Nigeria’s external reserves in 2022 was about $17 billion negative. In reaction, CardinalStone Securities said Net Fx reserves in the same period was positive at $17.4 billion. CBN has not been reacting to requests for comments lately on issues about its suspended and detained chief, Godwin Emefiele.  NESG Predicts Stronger Economic Growth