The nation’s external reserves gained a total sum of $183 million to settle at $47.8 billion in the first half of 2018, latest data from the Central Bank of Nigeria (CBN) has shown.
The foreign reserves monitored by the apex bank opened at $47.6 billion in June before closing at $47.8 billion, even as it added $9 billion between January to June, from $38.7 billion to $47.8 billion as at June 29, 2018.
The reserves have been hovering around $47billion since April 17, 2018 and reached the peak of about $47.85billion on May 9, 2018.
The global oil prices also have been hovering around $70 per barrel, stoking hopes in the industry that the market has finally turned a corner following a three-year slump.
The Governor of CBN, Mr. Godwin Emefiele, had predicted that the nation’s foreign reserves would soon hit $50billion mark.
The naira buffer has come under heavy pressure, forcing the CBN to woo local businesses importing goods from China to use the yuan instead of the Dollar in its effort to support the naira and boost reserves.
The apex bank explained that the currency swap is aimed at providing adequate local currency liquidity to Nigerian and Chinese industrialists and other businesses, thereby reducing the difficulties encountered in the search for third currencies.
Commenting on this development, Associate Professor and Head, Banking & Finance department, Nasarawa State University, Mr. Uche Uwaleke, said the currency swap, “will improve Nigeria economy.
He said, “When we talk about our reserves today, it is composed of Dollar. It means that we are over dependent on one currency and when something happened, then our reserves are in danger.
“The currency swap will diversify foreign exchange management by CBN. It is going to boost foreign reserves, appreciate the Naira because the pressure on Dollar will reduce.”
He said the currency swap in short-midterm will impact positively on the nation’s economy.
“The swap is going to last for two years but renewable.”
He explained further that with the agreement, China investors might be complied by Federal Government to come establish manufacturing companies in Nigeria.
He said: “If that happened, it is going to create jobs and increase production. I see more of Chinese companies producing in Nigeria and that again is expected to grow our GDP.
By the time we fix power, road and security that will encourage Chinese investors to invest in Nigeria economy. For the two countries, it is a win-win situation.”