CBN: $42.5b Foreign Reserves Cover 13-month Imports

banksGodwin Emefiele CBN Governor
  • CBN: $42.5b Foreign Reserves Cover 13-month Imports

The $42.5 billion foreign reserves as at December last year is enough to guarantee 13-month import cover for the country, a report by the Central Bank of Nigeria (CBN) has shown.

The stock of external reserves as at end-December 2018 stood at $42.5 billion, indicating a depletion of 0.03 per cent when compared with the level in the preceding quarter. However, when compared with the corresponding period of 2017, it indicated an accretion of 8.2 per cent.

According to the CBN, the level of external reserves could finance approximately 13 months of imports, compared with 10.3 and 15.6 months of imports cover recorded in the preceding quarter and corresponding period of 2017, respectively. These were however, above the West African Monetary Zone (WAMZ) and global benchmarks of six and three months, respectively.

It said portfolio investments inflow to the economy decreased significantly to $1.38 billion in the fourth quarter of 2018 from $1.79 trillion and $3.78 trillion in the preceding quarter and the corresponding period of 2017, respectively. However, other investment liabilities increased to $1.42 trillion when compared with a reversal of $3.07 trillion recorded in the preceding quarter.

Direct Investments inflow decreased by 28.3 per cent to $314.44 million when compared with the preceding quarter of 2018. It however, indicated a decline of 67.2 per cent when compared to the corresponding period of 2017.

Provisional fourth quarter 2018 Balance of Payment estimates for the Financial Ac- count showed a overturn from a net incurrence of financial liabilities of $4,615.17 million recorded in third quarter 2018 to a net acquisition of financial assets of $2327.91 million in the review period. This is also significantly lower than the net acquisition of financial assets of $3,528.62 million recorded in the corresponding period of 2017.

Net out-payments for services during the review period increased by 16.5 per cent to a deficit of $8,287.57 million when compared with the level recorded in third quarter 2018. When compared with the corresponding period of 2017, it indicated a much higher increase of about 76.9 per cent.

However, the deficit in the income account (net) decreased by 10.8 per cent to $3,713.84 million in the review period from a deficit of $4,161.76 million recorded in the preceding quarter. When compared with the level in the corresponding period of 2017 it indicated an increase of about 24.5 per cent.

About the Author

Samed Olukoya
CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York based Talk Markets and Investing.com, with over a decade long experience in the global financial market. Contact Samed on Twitter: @sameolukoya; Email: [email protected]; Tel: +2347065163489.

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