MARKET NEWS

Nigeria’s external reserves decreased by about $3.5billion within the first half (H1) to June.

The Central Bank of Nigeria (CBN) data on the movement in reserves show gross external reserves which stood at $38.448billion as at May decreased to $37.369billion as at June 26. The nation’s gross external reserves was $40.877billion as at closed year 2024.

The apex bank is yet to release external reserves figures for June 27 and June 30, but it has been on consistent decline since June 2 when it was $38.391 billion.

The gross external reserves depleted by about $1.07billion within three weeks and five days in this June, according to data at the Central Bank of Nigeria (CBN).

“CBN’s published gross foreign reserves closed the week at $37.37billion, down by $293.87million or 0.78 percent week-on-week (w/w). We expect the Naira to remain relatively stable in the near term, supported by continued foreign portfolio inflows and improved FX supply from non-bank corporates and exporters.

“However, the moderate decline in gross external reserves and the relatively modest FX inflow from the CBN suggest that the market may remain sensitive to demand side pressures,” Coronation Research analysts said in their June 30 note.

“There is also some concern on oil prices and production numbers and their effect of FX inflow from oil sales. Sustained investor interest in fixed income assets, if maintained could help anchor sentiment, though further stability will hinge on the pace of reserve accretion and the Central Bank’s ongoing intervention strategy,” they added.

Last week, the Naira appreciated by 52 basis points week-on-week (WoW) at the official market to close at N1,539.24/$, from its previous close of N1,547.36/$. Similarly, the Naira appreciated by 157bps at the parallel market to settle at N1,570/$ from its previous close of N1,595/$. Also, week-on-week, Nigeria’s external reserves fell by 91bps to settle at $37.369billion (previously, $37.714billion).

Brent slid below $68 per barrel and WTI dropped to $65.55 per barrel, down from $77 per barrel and $73 per barrel respectively at as the preceding week close. Crude oil prices fell sharply last week as geopolitical tensions in the Middle East eased, with Israel and Iran halting hostilities.