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By NBF News
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The Central Bank of Nigeria (CBN) sold a total of $1.5billion under the Wholesale Dutch Auction System (WDAS) at the end of February 2013, compared to only $830million sold in the preceding month, representing an increase of about 80.72 per cent over the records for January. Details of transactions released by FBN Capital Limited recently show that the rise could be attributed to the softening of offshore inflows to the interbank market as part of measures to buy naira-denominated federal government debts. The investment company noted that, 'An easing of that demand would normally oblige the CBN to increase its offer at the auction.' Meanwhile, FBN Capital revealed that CBN's MPR hike attracted additional $1.4billion to the nation's external reserves which rose to $47.4billion in February.

'We have further have evidence of the strength of Nigeria's external balance sheet with the increase of US$1.4bn in official reserves in February to $47.4billion,' it affirmed. FBN Capital further explained, 'The cover has grown in each of the seven past months (other than December), and the total by $10.9billion since the end of July when the MPC hiked the cash reserve requirement for banks by 400 bps to stem their foreign exchange activities. 'The reserves include the balance in the excess crude account, for which the latest available figure was $9billion.

We would expect the distributions from the account to the tiers of government to pick up as the FGN strives to reach an agreement with the state governors on the full functioning of the sovereign wealth fund. Drawdown in the run-up to the elections in 2015 would also not be surprising. 'Reserves at end-February provided cover for more than nine months' imports of goods, and over six months when we include services.' It would be recalled that the Debt Management Office (DMO) early this week announced that Nigeria 's domestic and external debt stood at N7.5 trillion.

Speaking to newsmen in Abuja on monday, during a seminar on Sub national Debt Sustainability Analysis/ Portfolio Review Training Programme for officers of Debt Management Departments (DMD) in the states, Director General of Debt Management Office (DMO), Dr Abraham Nwankwo, disclosed that the external debt of Nigeria, as at December 31, 2012 stood at $6.5 billion (N1.040 trillion) while her domestic debt obligations within the same period was N6.5trillion. He noted that despite the enormity of the debt overhang, government;s concern was not the size of the debt but the use to which these loans were deployed to.