12-19-2019, 11:36 AM
BUSINESS
‘$39.32bn reserves can ensure naira stability’
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![[Image: N1000-notes-naira.png]](https://www.newtelegraphng.com/wp-content/uploads/2017/03/N1000-notes-naira.png)
Although they have been on a downtrend in recent months, the current level of the nation’s external reserves is still strong, enough to ensure naira stability well into the first half of next year, analysts at Coronation Research have said.
The analysts stated this in a note obtained by New Telegraph at the weekend.
As the analysts put it: “The Central Bank of Nigeria’s (CBN) foreign exchange reserves have shed $381.40million so far in December bringing the gross figure to $39.3billion( a 30-day moving average). One-year Open Market Operations (OMO) yields at 14.64 per cent are 264bps below what they were at the start of the year (17.28 per cent).
“In our view this may pose a challenge for the CBN in attracting much-needed Foreign Portfolio Investment (FPI), and the recent negative ratings outlook on Nigeria from Moody’s may not help.
In our view, however, the current level of FX reserves is sufficient to sustain the naira at current levels for the rest of 2019 and well into H1 2020.”
CBN Governor, Mr. Godwin Emefiele, had stated at the opening of the 2019 Annual Bankers’ Committee Retreat in Ogun State at the weekend that the apex bank’s measures had resulted in the naira-dollar exchange rate remaining stable at the Investors and Exporters’ (I&E) foreign exchange window over the past 30 months at N360 – $1, adding that there has been significant convergence in the exchange rate across the various market windows.
He disclosed that over $60billion worth of transactions had taken place on the I&E window since it was established by the CBN on April 2017.
The CBN Governor, who attributed the huge volume of transactions on the I&E window to the impact of the regulator’s tight monetary policy regime, as well as its measures aimed at ensuring attractive yields in the money market, stated that the country’s foreign exchange reserves, which are currently at $39 billion, compared with $23billion in October 2016, could finance nine months of current import commitments.
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‘$39.32bn reserves can ensure naira stability’
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Although they have been on a downtrend in recent months, the current level of the nation’s external reserves is still strong, enough to ensure naira stability well into the first half of next year, analysts at Coronation Research have said.
The analysts stated this in a note obtained by New Telegraph at the weekend.
As the analysts put it: “The Central Bank of Nigeria’s (CBN) foreign exchange reserves have shed $381.40million so far in December bringing the gross figure to $39.3billion( a 30-day moving average). One-year Open Market Operations (OMO) yields at 14.64 per cent are 264bps below what they were at the start of the year (17.28 per cent).
“In our view this may pose a challenge for the CBN in attracting much-needed Foreign Portfolio Investment (FPI), and the recent negative ratings outlook on Nigeria from Moody’s may not help.
In our view, however, the current level of FX reserves is sufficient to sustain the naira at current levels for the rest of 2019 and well into H1 2020.”
CBN Governor, Mr. Godwin Emefiele, had stated at the opening of the 2019 Annual Bankers’ Committee Retreat in Ogun State at the weekend that the apex bank’s measures had resulted in the naira-dollar exchange rate remaining stable at the Investors and Exporters’ (I&E) foreign exchange window over the past 30 months at N360 – $1, adding that there has been significant convergence in the exchange rate across the various market windows.
He disclosed that over $60billion worth of transactions had taken place on the I&E window since it was established by the CBN on April 2017.
The CBN Governor, who attributed the huge volume of transactions on the I&E window to the impact of the regulator’s tight monetary policy regime, as well as its measures aimed at ensuring attractive yields in the money market, stated that the country’s foreign exchange reserves, which are currently at $39 billion, compared with $23billion in October 2016, could finance nine months of current import commitments.
[url=https://www.newtelegraphng.com/category/business/]B