The Nigeria’s external reserves grew to $95.9 million in seven days amids increase in global oil price that has climb above $56 per barrel as at yesterday as well as the inflows from the International Money Transfer Operations (IMTOs).
Accoridng to the statement on the CBN’s website disclosed that the nigeria’s external reserves stood at $30.39 billion at the end of April 10, 2017, representing an increase of $95.9 million from March 31, 2017 when it was $30.29 billion following increase in global oil prices and dollar inflows from Nigerians in Diaspora.
A report of that Oil prices will likely be traded at average $55 per barrel in 2017, may have contributed to present steady increase in external reserves thereby strengthen Naira against the foreign currency at the parallel market.
According to the report, “The parallel market rate is beginning to appreciate in response to improvements in the central bank’s capacity to supply foreign exchange, with the parallel market rate rising to N380/$ in March 2015, after touching an all-time low of N520/$ the month before.
“If the oil price holds up at the current level and external reserves continue to grow, the parallel market rate will continue to appreciate until it converges with the inter-bank rate.
“Despite the constraints on policy responses in 2016, cycles are now on the upturn in 2017, and the recession, inflation and weakness of the Naira are most likely to fizzle out. “Oil price has risen from a low of $28 per barrel in the first quarter of 2016 to $55 in the first quarter of 2017, external reserves have risen steadily for six months to climbed above $30 billion by March 2017, after reaching a low of $23.9 billion in October 2016.
“The oil price is likely to average about $55 in 2017. Government also expects oil production to be stable at 2.2 million barrels per day in 2017 as expressed in the federal budget proposals. The outlook for growth, inflation and exchange rate is brightened by this.
“Between the two devaluations of the inter-bank rate, CBN introduced a lot of obstructionist policies to suppress demand, like forcing recipients of inward remittances to receive their funds in Naira at the controlled inter-bank exchange rate, restricting foreign currency transactions on accounts held with Nigerian banks, and publishing an infamous list of 41 import items that would not be funded by CBN. Such demand restrictions amplified the cyclical downswing and triggered the recession.