The Central Bank of Nigeria (CBN) has
recorded fresh rise of foreign reserves for four days consecutively – for
only the second time since President Muhammadu Buhari took office.
As at March 22, 2016, the foreign reserves had experienced a rise of $34.7
million in four days, rising from $27,853,597,008 on March 16 to
$27,888,285,805 by March 21.
By February 22, the reserves had a rise
of $13 million while finding its way out of 11-year low positions.
The first consecutive rise started on
Thursday February 24, from $27.804 billion to $27.823 billion as at February
29, surging gradually through the days in-between.
The rise has been attributed to a
gradual recovery in oil prices and strict restrictions of capital flow.
After rising by $350 million in August
2015, the foreign reserves have not experienced any of such huge leaps in 6
months, with a meagre rise of $32 million in February 2016.
Major restrictions have been put in
place to curb excessive outflow of Nigeria’s foreign exchange, following fears
that the reserves may be down to zero in 10 months.
Speaking at TheCable devaluation
debate, Adams Oshiomhole, governor of Edo state, had said the nation’s forex
outflows vastly outweighed inflow.
“As we speak, I understand that our
forex inflow is under $1 billion,” he had said.
“If you’re earning less than one
billion, and your outflow remains at more than $4 billion, obviously, all other
things being equal, I imagine that in one year, our foreign reserves would be
zero.”
The position of the CBN and the federal
government on forex has been fiercely criticized by many, who consider capital
control as counter-productive.
However, the recent rise of reserves
and the passage of the 2016 budget may well vindicate the CBN and the Muhammadu
Buhari-led federal government.
Culled from thecableng
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