External reserves rise again, hit 25-month high by August 29 2012

Foreign exchange reserves rose to a 25-month high of $38.62bn by August 29, and were 5.81 per cent up on the previous month, driven by rising crude exports.

The Nigerian National Petroleum Corporation said about 85 per cent of increase in reserves was from crude oil. Nigeria’s crude oil production hit a record high of 2.7 million barrels per day on August 1.

The forex reserves stood at $36.5bn on same date last month and at N37.18bn on August 25 last year, the closest available comparable figure.

Reserves had risen by 5.71 per cent month-on-month to $38.51bn at August 28, 2012, from $36.43bn recorded a month earlier.

It showed that forex reserves rose to a two-year high of $38.51bn. The reserves have not been as high as this since August 10, 2010 when they stood at $38.59bn.Forex reserves had fallen by 1.4 per cent month-on-month to $36.40bn at July 25, from $36.93bn recorded a month earlier.

The $53m decline, according to analysts was attributed to falling oil prices and strong dollar demand.The reserves had plunged in the month of June, dropping by $1bn to $36.768bn on June 28, from $37.768bn it stood on June 6, 2012.

Forex reserves had risen to their highest in 21 months to $37.02bn by May 14, from $36.66bn at the end of April.The CBN had reportedly said that the nation’s external reserves had continued to grow since the August 1, 2012. Consequently, the Minister of Finance and coordinating minister for the economy, Dr Ngozi Okonjo-Iweala, stressed the need for the country to shore up its external reserves. At a meeting with the Organised Private Sector in Lagos recently, Okonjo-Iweala said that there was the need to build up the reserves to $50bn before December. She said that this would help the country to stand on its feet in the event of any global economic recession. The CBN sold a total of $10.18bn at the Wholesale Dutch Auction System in the first half of this year.The CBN had sold and offered a total value of $14.85bn at the WDAS in the first quarter of last year. Forex sales were less than forex offered by $285m by half- year 2012.

Half year WDAS forex supply for 2011 was $14.85bn, as against $10.45bn in 2012, representing a decrease of 29.70 per cent.

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