External reserves up $2.76bn boost in September 2021

Nigeria’s external reserve rose by $2.76 billion in the month of September 2021 to close at $36.78 billion at the end of the month.

This is according to data on the Central Bank of Nigeria (CBN) movement in the external portal. The figure is the highest monthly gain recorded in the external reserve position since May 2020, when the reserve gained $3.07 billion in a single month.

According to CBN data, Nigeria’s foreign reserve rose by 8.13 per cent from $34.02 billion recorded in August 2021 to $36.78 billion in September.

The external outstanding reserve gained a sum of $1.41 billion year-to-date compared to $35.37 billion recorded as of the end of 2020, representing a 4 per cent increase between January and September 2021.

An increase in foreign reserve is a good omen to the economy as it means the apex bank has more firing power at its disposal to intervene in the forex market to reduce the pressure on the country’s exchange rate.

As of November 2020, when Nigeria’s reserve was at $35 billion the CBN governor, Godwin Emefiele had said that the reserve is sufficient to cover 7 months of goods and services import.

The increase is in line with recent projections putting Nigeria’s external reserve at $40 billion following the $3.35 billion direct allocations approved by the International Monetary Fund, the prospects of raising funds from the international debt market, and the bullish crude oil prices.