By Ismail Auwal
Nigeria’s external reserves increased by $5.15 billion in 2021 to close at $40.52 billion on December 31, 2021, a 14.5 percent increase from the previous year’s end of $35.37 billion.
This is according to data obtained from the Central Bank of Nigeria’s daily tracker (CBN).
The increase in the country’s reserve level is largely attributed to the federal government’s $4 billion Eurobond, which was secured in September and will see the reserve surpass $41 billion in October 2021.
According to Nairametrics, Nigeria also secured a $3.35 billion IMF facility under the Special Drawing Rights during the review year, which boosted reserves. By intervening in the official Investors and Exporters window, the Central Bank’s external reserve has served as a significant buffer in defending the country’s exchange rate.
Notably, over $32 billion in FX changed hands in the review year, owing largely to the Central Bank’s significant intervention in the market following the imposition of a ban on FX sales to BDC operators in the country.
The nation’s foreign reserve had gained $5.99 billion in October, however, in November, the reserve lost $611.01 million in value as against the previous month’s gain and a $2.76 million gain in September 2021. In December 2021, the reserve dipped by $66.17 million, putting the annual gain at $5.15 billion.
Nigeria’s reserve has declined in recent months as the Central Bank continues to intervene in the official forex market to stabilize the local currency. Especially, at a time when naira is highly volatile at the black market.
