Nigeria’s External Reserves Rises By $2bn In January

Data on the website of the Central Bank of Nigerian (CBN) showed that the nation’s external reserves increased by $1.859bn or 4.79% to a new high of $40.625bn from $38.765bn at the end December 2017.
The steady growth in Nigeria’s reserves has been attributed to the steady rise in oil price at the international market, the CBN’s strategy of effectively managing forex demand by various sectors of the economy, in addition to the policy restricting access to forex from the Nigerian forex market by importers of some 41 items as the major turning point.
The latest growth is a continuation of last year’s when the reserves level soared by $12.922bn or 50% to $38.765bn on December 29, 2017, from $25.843bn on December 30, 2016, according to data available on the website of the CBN.
In its outlook for 2018, released on Monday, Renaissance Capital (Rencap) recalled a statement by Godwin Emefiele, Governor of the CBN of plans to build up FX reserves to $45bn, still basking in the euphoria of last year’s remarkable growth, which it interpreted to mean that Nigeria’s “central bank will not use reserves to defend the naira, if such a move would come at the expense of this strategy.
But investment banking group- Capital Bancorp Plc that sustained improvement in the economy could lift Nigeria’s reserve above $48.5bn by this year end, which the company’s Managing Director, Higo Aigboje, believes is achievable if the government does not irrationally increase spending especially in the second half of the year as Nigeria prepares for general elections beginning from February 2019.