Boost For Naira as Nigeria FX Reserves Gain $620m in 10 Days as FG Announces Domestic Dollar Bond

• Nigeria’s foreign exchange reserve has been increased by $620 million in 10 days after the Nigerian government’s domestic dollar bond
• Currently, the country’s reserves stand at $36.87 billion as of September 12, 2024, from $36.24 billion on September 2, 2024
• Experts believe the surge in FX reserves will aid the naira’s recovery in the currency markets

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

Nigeria’s firepower against naira depreciation, the foreign exchange reserves, increased by $621.2 million in 10 days following the successful sale of a domestic dollar bond.

The country’s gross FX reserves rose from $36.24 billion on September 2, 2024, to $36.87 billion by September 12, 2024.

Domestic dollar sale impacts the naira’s value

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The information is from the Central Bank of Nigeria (CBN).

According to the apex bank, the growth reflects the positive impact of the domestic dollar bond, which the Nigerian government said was over-subscribed by $400 million.

Reports say that on September 2, 2024, Nigeria’s external reserves stood at $36.24 billion but grew in the next 10 days to $36.87 billion as of September 12, 2024.

Breakdown of FX rise

Analysis of the reserves shows that the first notable rise happened between September 2 and September 3, 2024, when the reserves increased from $36.24 billion to $36.27 billion, showing a modest rise of about $30 million.

The growth continued in the next five days, with the reserve at $36.30 billion as of September 4, reaching $36.24 billion on September 5.

By September 6, 2024, the nation’s reserves hit $36.39 billion, representing a robust increase as the CBN’s bond plan gained momentum.

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The increase between September 6 and September 9 saw the reserves hitting 36.64 billion, showing a solid phase in accumulation.

The $25 million gain during the weekend shows strong demand for Nigeria’s domestic dollar bong and increased liquidity.

The trend continued into the second week of September, with the reserves hitting $36.73 billion on September 10 before finally climbing to $36.81 billion on September 11, 2024.

Naira appreciates in the official window

The development comes as the Nigerian currency, the naira, recovered in the official window.

According to data from FMDQ Securities, the naira closed at N1,558.75/$1 at the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, September 13, 2024. 

This represents an N91 appreciation compared to the N1,649.76/$1 previous day's exchange rate. 

During the week, the Nigerian government announced that its initial $500 million domestic bond raise program was oversubscribed by $400 million, indicating considerable interest in the country’s economy. 

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This development means the Central Bank of Nigeria now has more capacity to intervene and increase forex supply. 

CBN leaves Customs FX rates for cargo clearance unchanged

Legit.ng earlier reported that the CBN may have heeded experts’ warnings about constantly changing the Customs exchange rates for cargo clearance to leave them at N1,000 per dollar quarterly.

The development comes as the Customs Exchange rates for Cargo clearance remained unchanged for almost one week.

Information from the Customs trade portal shows that the last time the CBN tweaked the Customs FX rates was September 5, 2024, when it crashed from N1,625.88 per dollar to N1,564.929.

Source: Legit.ng