Data released by the Central Bank of Nigeria (CBN) on Monday has revealed that the country’s external reserves increased by $155,627,865.63 to hit $45.2 billion in June 2019.
Highest figure since September 2018: The increase from $45,004,529,059.84 in May to $45,160,156,925.47 in June 2019, marks a 35% points increase within a period of three weeks in 2019. This is the highest figure that has been recorded in 2019 and the highest since the reserves’ depletion in May 2018 when it stood at $47.8 billion.
Nairametrics reported that in May, the external reserves increased by $212.2 million to hit $45 billion the mark.
Factors Responsible: The reason for the increase in the external reserves can be traced to the sustained capital inflows, precipitated by the stability in both the bureau-de-change (BDC), and the I & E windows, the stable oil price in the world oil market, and the positive growth in the nation’s Gross Domestic Product in Q1 2019.
The recovered funds from the activities of the Presidential Initiatives on Continuous Audit (PICA) can also be attributed as a factor leading to this rise in the reserves. It was reported that over N600 billion has been recovered since the inception of the initiatives in 2016.
Analysts have projected further increase in the external reserves. It is expected to rise above the current $45 billion mark, especially so if the world oil price continues to rally.
Bottom line: The rise in the external reserves means that the stability of the naira is expected to continue in the long run, even as we cross over to the second half of the year.