Increased foreign exchange liquidity has started filtering through key economic sectors and prop up Naira value against the US dollar.
The Naira appreciated against the US dollar to N363 on Wednesday, up from N366 recorded a week ago.
The continuous intervention has helped sustain economic activities and stimulates growth, the central bank on Tuesday intervened again in the interbank foreign exchange market with the sale of $195 million.
Since the economy recovered in the second quarter, experts have said recovery was aided by the surge in global oil prices. Suggesting that recovery might be temporary if not diversify across key sectors.
Also, while oil sector rebounded from 15.4 percent contraction recorded in the first quarter to grow at 1.64 in the second quarter, the report showed growth is not broad-based with the manufacturing and services sectors growing below the preceding quarter. The non-oil sector contributes about 90 percent to the gross domestic product, suggesting sustainability of the sector is needed to deepen growth and create new jobs.
“Rising global oil prices remained the force behind economic recovery and has equipped the Central Bank of Nigeria with capital to consistently support the Naira and at the same time stimulate the economy by boosting forex liquidity,” said Samed Olukoya, a foreign exchange research analyst at Investors King Ltd.
Foreign reserves rose to $33 billion in September. Up from $31 billion in August.
Meanwhile, the Debt Management Office announced the Federal Government would raise between N270 billion and N330 billion in naira-denominated bonds in the fourth quarter.
According to the Debt Management office, Nigeria’s debt stood at N19.16 trillion as of June 2017. Foreign debt payment over the next 10 years is estimated to be over $11 billion.
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