Mrs Ngozi Okonjo Iweala, Finance Minister
Nigeria's external reserves sustained its upward trend in October due to the upswing in prices of crude oil in the international market as it appreciated by three per cent to $42.566 billion at the end of the month.
THISDAY checks showed that the figure represented an improvement by $1.226 billion last month, compared with the $41.330 billion it stood as at October 2. The forex reserves level, derived majorly from the sales of crude oil, was at $32.72 billion last year.
However, oil prices rose further Wednesday on concerns about near-term oil supplies in the United States following a fierce storm that caused havoc across the North-eastern part of the country.
The benchmark crude for December delivery increased by 65 cents to $86.33 a barrel on the New York Mercantile Exchange. In London, Brent crude, used to price many international varieties of oil, was up 38 cents to $109.46 per barrel.
Meanwhile, the naira appreciated against the US dollar at the Central Bank of Nigeria’s (CBN’s) regulated Wholesale Dutch Auction System (WDAS) as the regulator sliced its supply of the greenback.
The local jumped by two kobo to close at N155.74 to a dollar on the last trading session in October held yesterday, compared with the N155.76 to a dollar it closed on Monday.
The apex bank offered a total of $50 million which was completely sold, lower than the $100 million it offered the market on Monday. Similarly, the naira gained slightly at the interbank market as it closed at N157.06 to a dollar yesterday, from N157.06 to a dollar on Tuesday.
President, Financial Market Dealers Association (FMDA), Mr. Akinsowon Dawodu, predicted that the naira would be stable for the rest of the year.
According to him, “even though the market may record some volatility due to the likelihood that portfolio investors may come in or move out towards the end of the year, it will not distort the market.”
Dawodu, who spoke in an exclusive interview with THISDAY, added: “Basically the central bank, with the reserves up by $10 billion year-on-year, will comfortably be able to defend the currency. So I see exchange rate being stable. Interest rates too will remain stable.
“I know that the CBN governor and the Monetary Policy Committee are focused on price stability and they are very convinced of the efficacy of using forex to achieve that. So they believe that forex stability is very key to price stability,” he added.