rose by 3.63 per cent on the month of April to $36.05 billion the highest in more than one year; Central Bank of Nigeria CBN, data has shown. The external reserves stood at $34.47 billion a year ago and were at $34.74 billion a month earlier. Though the reserves have seen declining in the past three years despite rising oil prices, gradual reduction in demand for dollars at the bi-weekly foreign exchange auction this year has meant the Central Bank spends less of its reserves to support the naira. Nigeria relies on crude exports for more than 95 per cent of its foreign exchange earnings and investors watch reserve data closely to gauge the defenses the country has against a potential dip in oil prices.
Foreign Exchange reserves have picked up marginally in recent weeks as dollar demand at the foreign exchange auction window dissipated amid improved naira confidence. The country’s Excess Crude Account (ECA), meant to deposit savings to cushion against future oil price falls, is constantly raided and shared among the three tiers of government, which prevents a faster rebound in overall foreign exchange reserves.
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