Nigeria’s foreign reserve in July 2021 increases by $79.1 million

CBN guidelines on disposal of non-permissible income

Nigeria’s foreign reserve rose marginally for the month of July 2021 by $79.1 million to close at $33.4 billion, compared to $33.32 billion recorded at the end of June 2021..

According to data from the Central Bank of Nigeria’s (CBN) website, this however, declined by $1.97 billion, compared to $35.37 billion at the start of the year.

Earlier in the year, the country’s foreign reserve experienced a consistent decline in the first half, until recently in July, which had piled pressure on the exchange rate of the naira.. The reserve gained $314.7 million in 12 days.

A number of factors have been attributed to the decline in the country’s foreign reserve portfolio including the decline in export earnings, widening trade deficit, the slump in diaspora remittances, huge decline in foreign inflows, intervention at the I&E window and at the BDCs.

Impact of foreign reserve

An increase in the foreign reserve of the country is expected to ease the pressure currently on the naira by making more funds available to the apex bank. This will enable the CBN to adequately manage the naira against foreign currencies, as well as help the government to adequately cater for its financial obligations.

Author: Greg