Naira Rates: Nigeria Foreign Reserve Hits $36.87B Following the Sale of Domestic Dollar Bond

Breakdown of the Uprise in Foreign Exchange Reserves

The first significant increments ensued between September 2 and September 3, 2024, when the reserve rose from $36.24B to $36.27B, a satisfactory rise of approximately $30M.

The next few days, September 4 and 5, recorded a progression that implied a sustained flow of foreign exchange into the country. On the 3rd of September, the reserves stood at $36.30B and by September 4th, it was at $36.33B.

Towards September 6th, the reserves hit $36.39B, marking a more significant increase as the CBN’s bond strategy bagged an upswing. Upon hitting $36.64B, between Sept 6th and 9th, there was an oversubscription taking the reserve to new highs.

This $250M growth over the weekend suggests robust demand for Nigeria’s dollar bond and reflects increased liquidity entering the financial system.

This trend then continued steadily and moved into the second week of September, with the reserves skyrocketing to $36.73B on September 10, before further moving to $36.81B on September 11.

Understanding the Nigerian Government FGN Dollar Bond.

The final figure of $36.87B was then gathered between September 11 and September 12, 2024, with the reserves jumping by $54.4M, which was the highest single-day increase.

Reasons for the Uprise in Foreign Exchange Reserves

This uprising can be associated with Nigeria’s recent domestic bond issuance, targeted at attracting foreign capital and heightening reserves. The rise in reserves has come at a very beneficial time for the country, especially with the struggles involved in sustaining the naira against global currency fluctuations.

Aside from the bond sales, other factors resulting in the overall rise in reserves are increased foreign direct investment, a positive trade balance, and robust remittance inflows from the Nigerians in diaspora.

What you Should Know

Data from DiutoCoinNews Price Index also shows that the parallel market rate for crypto trades closed at 1652.75/$1 on 2024-09-13 19:43:14.

According to data from FMDQ Securities, the CBN Naira rate closed at N1,558.75/$1 at the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, September 13, 2024.

During the week, the Nigerian government announced that its initial $500M domestic bond raise program was oversubscribed by $400M, indicating considerable interest in the country’s economy.