(SINL NIGERIA) Nigeria’s gross external reserves increased by $7 billion from the beginning of the year to date, according to data from the Central Bank.
Data shows that gross balance in the external reserves crossed $40 billion from $33.016 billion at the beginning of the year.
According to Marketforces report, this surge was supported by improved remittances from Nigeria’s in diaspora and sustained yields attraction in the fixed income market. Data from the CBN does not showed sources of the inflows but analysts believe accretion came from foreign portfolio investors, remittances and oil deals.
Market expectation of resurgence in economic indicators and reforms have boosted foreign investors’ confidence following the Central Bank clearance of FX backlog early in the year. Finance Minister Wale Edun has consistently maintain $1billion FX inflows target for the nation each month.
According to data from the CBN, the gross balance on the nation’s external reserves reached $40.037 billion this week on the back of sustained FX inflows.
In its latest OMO bills auction, foreign investors’ participation boosted total investment bets on the bills. Investors staked about $1.45 trillion on the OMO bills, which some analysts said was basically driven by foreign interest. Foreign reserves hit 33 months high, the last time Nigeria’s external reserves print at similar level was in February 2022 at $40.011 billion.
Despite the surge, the naira remains under pressures across the forex market, raising question on the purpose of a nation keeping external reserves high when the local currency is falling.
