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External Reserves Increase Slightly in August

Dollar reserve

CEM REPORT, FINANCE | The policies implemented by the Central Bank of Nigeria (CBN) may have yielded positive results as Nigeria’s external reserves tilted upward by 0.005 per cent recording a marginal increase of $1.87 million.

The nation’s external reserves closed at $33.954 billion as of August 31, 2023, from $37.082 billion with which it opened the year according to CBN report.

The external reserves in eight months of 2023 depreciated by $3.13 billion and it is against the backdrop of CBN interventions in the foreign exchange.


The increase experienced in August has been attributed to a series of factors especially the increase in the price of crude from $87.98 per barrel in July to 91.8 per barrel in August.

The reported $91.80 per barrel is the highest export crude oil price since November 17, 2022, when the price was at $93.41 per barrel.

Also, increased diaspora inflow and the $3 billion ’emergency loan’ from Afrexim Bank announced by the Nigerian National Petroleum Company Limited (NNPC) has been listed by experts as a contributing factor to bolstering the external reserves in August.

With the foreign reserves at $33.95billion as of August 31, 2023, the Naira at the Investors & Exporters (I & E) Foreign Exchange market closed the month under review at N757.023 against the dollar from N757.52 against the dollar it closed the previous month.

Also, in August the local currency gained 0.07 per cent against the dollar at the I & E FX window.

The local currency at the specialised window for investors and exporters depreciated by 69 per cent in eight months from N448.55 against the dollar it closed in 2022.

Furthermore, Analysts at Afrinvest, stated: “On the home front, the CBN foreign reserves was flattish m/m at $ 33.2 billion, as month-end accretion of $ 333.0 million offset outflows. Meanwhile, the official and parallel market segments traded in opposite directions amid news of the NNPCL-Afrexim $ 3.0 billion loan agreement and the publication of CBN’s outstanding financial report. At the I&E window, the base currency (USD) depreciated 0.8 per cent m/m against the Naira to close at N762.71/$1.00 as activity level rose by 27.4 per cent m/m to $2.2billion. In contrast, the parallel market rate lost 5.4 per cent m/m to N920.00/$1.00.

“At the FMDQ Securities Exchange (SE) FX Futures Contract Market, the value of the open contract declined 11.3 per cent m/m to $5.6billion, partially due to the muted interest in the available open contracts, and on the other hand, the settlement of the $708.5million August 30, 2023 contract which matured during the month. In September, we expect the Naira to trade within a similar band across market segments as FX imbalance lingers on the back of weak FX reserves and sustained high demand in the parallel market.”

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