External reserves climbed to $30.56 billion as of April 18, the highest level in 2017, as the Central Bank of Nigeria (CBN) tries to rebuild currency buffers hammered by dwindling global oil prices.
The rise coincides with a recent rise in the price of crude, which account for the bulk of foreign currency earnings.
The nation’s reserves up by 18.3 per cent or $4.7 billion for this year but are still far off their peak of $64 billion as at August 2008.
This is coming on the heels of increased gap between the interbank market and parallel market end of the foreign exchange market.
The CBN has not provided any reason for the recent rise, which may be attributed to the recent rise in global oil prices and inflow from International Money Transfer Operations (IMTO)
The Organization of Petroleum Exporting Countries (OPEC), last week said Nigeria’s oil production drastically dropped from 2 million barrels per day to as low as 1.27 million barrels per day.
OPEC said the country produced 1.269 million barrels per day last month. The 13-members OPEC cartel, in its newly released monthly oil market report for the month of April said Nigeria recorded the biggest decline of 157,000 barrels per day in March.
Hitherto, analysts had expressed that the marginal increase in oil production after the government and Niger-Delta Avengers entered into truce also contributed to the recent rally on the reserves.
They explained that the output cut agreement reached by OPEC members in late year November and the OPEC and non-OPEC members deal in December is expected to provide boost to the foreign reserves going forward and thereby supporting the fiscal and monetary policies makers in steering the economy out of current recession.
At the foreign exchange market, the Naira, yesterday gained a seven points to close at N400 against N407 it traded on Tuesday.
The local currency on Tuesday had appreciated by three points from 410 sold per dollar on the first trading day of the week. It was traded at N497 and N420 to the pound sterling and Euro, respectively, at the unofficial segment of the market.
Although, the naira at the Bureau De Change (BDC), the dollar was sold at N362 to the dollar, while the pound and the Euro closed at N495 and N428, respectively.
However, trading at the interbank saw the naira closed at N314.75 to the dollar, while steady against pound and Euro at N404.51 and N337.53, respectively.
Throughout last week, the local currency was seen hovering between N405- N410 to the dollar on the parallel market, compared with N398 to a dollar the previous week.
The president of BDC operators, Aminu Gwadabe, had called on the government to ensure the naira remains stable on its sovereign journey, adding that there must quick review and increase security surveillance of our nation boarders and airports.