Nigeria’s foreign reserves swelled by $109.7m in the first three days of August amid rift between the Central Bank of Nigeria and Bureau de Change operators.
The Central Bank of Nigeria revealed in its reserves movement that external reserves rose to $33,51bn on August 3, 2021 from the $33.4bn recorded on July 30.
In July, the reserves plunged by $79.11m to close the month at $33.4bn. This is compared to the increase of $895.59m recorded in June resulting to reserves to close the month at $34.22bn.
The CBN Governor, Godwin Emefilele, had during the Monetary Policy Committee meeting said it will suspend the weekly forex intervention to BDCs.
In the 137th communique the apex bank boss urged the Federal Government to issue diaspora bonds for the building of infrastructures which would in turn support the reserves.
Muda Yusuf, an Economist and a former Director-General of the Lagos Chamber of Commerce and Industry said the issue is how to sustain the marginal growth in reserves.
He said there are many possibilities that the rise in the reserves “could be the impact of recovery in crude oil prices and consequent accretion to reserves.
“It may have resulted from a spike in remittances; it could have been a consequence of increased portfolio flows etc.
But he said it is less likely that the reserves grew due to the cessation of forex sales to BDCs.
He noted “The CBN is merely substituting the forex sales to BDCs with forex sales to banks. The reserve baseline would therefore not be materially impacted.”