Nigeria's External Reserves Hit $46 Billion

Nigeria's external reserves that have been upbeat since fourth quarter of last year extended its accretion to close at $46.090 billion last Monday.

Data gathered from the Central Bank of Nigeria's (CBN's) website yesterday, showed that the current forex reserves position, represented an increase by $1.753 billion or 3.95 per cent this year, compared to the $44.337 billion it stood as at January 2, 2013.

It was learnt that the performance of the reserves which is derived majorly from the proceeds of crude oil sale was largely influenced by the appreciation of crude oil prices.

The price of US oil rebounded to near $97 a barrel yesterday, taking its cue from rising stock markets in Europe. Benchmark oil for March delivery was up 72 cents to $96.89 a barrel in electronic trading on the New York Mercantile Exchange.

Also, the Brent crude, the benchmark used to set prices for oil used by many US refineries, was up 95 cents to $116.55 in London.

Nigeria's Bonny Light also stood at $117 yesterday, according to the CBN.

Analysts at FSDH Merchant Bank Limited pointed out that the collaboration between the Federal Government and the banking sector regulator to improve the external reserves position had continued to yield positive results.

'Also, the favourable oil prices at the international market, improved domestic output, fiscal prudence, improved ratings from agencies and the inclusion of FGN Bonds in the JP Morgan Emerging Market Government Bond Index have all contributed to the improvement in the external reserves position of the country.

'The current external reserve can support stable exchange rate in Nigeria. The current level of external reserve is higher than both the International Monetary Fund and FSDH Research projections. The reserve is sufficient to cover over 11 months of imports of goods and services, higher than the threshold of three months,' the firm added. (Thisday)