Upward movement in reserves

Gross official reserves increased by US$2.1bn in March to US$44.4bn. Oil revenue has been the primary driver for movements in reserves. Over the past month, the oil price has been above US$60/b. In addition, oil production has been relatively stable (an obvious positive for accumulation) due to visible reduction in vandalism of oil assets. Trades of foreign portfolio investors (FPIs) have also contributed to the pick-up. Since 23 February (i.e. post the presidential election) the investors and exporters’ fx window (NAFEX) has recorded inflows of over US$5.0bn, with FPIs accounting for 73% of the total.


  • Although the trend in weekly transactions at the NAFEX has been downwards, weekly turnover has remained above US$1bn over the past five weeks. The transactions cover both sides of trades.
  • The reserves data are gross, covering just fx and exclude swap contracts.
  • The figure for gross reserves includes the balance in the excess crude account, for which the latest figure in the public domain is US$183m.
  • Reserves at end-March covered more than 13 months’ merchandise imports, and eight months when we include services on the basis of the balance of payments (BoP) to December 2018. This is a healthy fiscal buffer by any criteria.


Official reserves (US$ bn; 30-day moving average basis)

Sources: CBN; FBNQuest Capital Research


  • The cushion is not wholly the CBN’s. Its latest figures (from November) show that it was the owner of 86% of reserves.
  • Given this cushion of reserves and the fact that sectors such as manufacturing are benefiting from fx availability, we doubt the CBN will be revising its fx policy in the near-future.

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