By NBF News
Listen to article Despite the break in the bi-weekly foreign exchange auction by the Central Bank of Nigeria (CBN), the naira strengthened last week, reaching the highest in more than two months, as Nigerians living abroad returned for the holiday period, increasing the supply of dollars.

The naira appreciated by 0.6 per cent to 156 a dollar having risen by four per cent this year, the second-best performer in Africa, according to data compiled by Bloomberg.

'Many Nigerians in the diaspora have come home with dollars, which increased the supply,' head of research at Vetiva Capital Management Limited, Pabina Yinkere, said.

Remittances to sub-Saharan African countries from citizens abroad are forecast to increase 6.3 per cent to $24 billion, the World Bank said in June. Nigeria, Kenya, Sudan, Senegal and South Africa are the largest recipients of remittances in sub-Saharan Africa, with about 69 per cent of the funds in 2010 from migrants in the U.S. and Western Europe, according to the bank.

Meanwhile, the foreign external reserves of the country continued to depreciate. Spokesman of the CBN, Ugochukwu Okoroafor told Leadership that the decline in the value of the external reserves was a trend that ought not to cause any worry. He said the decline was a trend that was actually moving upwards.

The reserves had declined by $387.77 million or 0.87 per cent within a period of three weeks to $44.256 billion from the year high of $44.644billion it attained on December 7,2012.

The Coordinating Minister of the Economy and Finance Minister Dr Ngozi Okonjo-Iweala and the Governor of the CBN, Mallam Sanusi Lamido Sanusi had in recent times emphasized the need to build up to $50 billion before the end of the year (2012), so as to serve as cushion for the Nigerian economy in case of any global economic recess.

'There is a lot of global uncertainty, and in that respect we still need to make sure that we build sufficient buffers to protect us. If anything should happen, we don't have enough in our excess crude account or the reserves to save us. So we need to turn this around and build buffers sufficient to take care of the entire country for three months,' Okonjo-Iweala had said.

The yield on Nigeria' $500 million of Eurobonds due January 2021 declined one basis point to 4.008 per cent.