Nigeria’s foreign exchange reserves experienced a notable increase of $621.2 million over a span of 10 days, following the successful issuance of a domestic dollar bond.
The reserves grew from $36.24 billion on September 2, 2024, to $36.87 billion by September 12, 2024, according to the Central Bank of Nigeria (CBN).
The initial increase was recorded between September 2 and September 3, 2024, when reserves rose from $36.24 billion to $36.27 billion, reflecting a modest gain of about $30 million.
The reserves continued to climb gradually, reaching $36.30 billion by September 4 and $36.33 billion by September 5. This steady increase indicated a consistent inflow of foreign exchange into the country.
By September 6, 2024, the reserves had grown to $36.39 billion, showing a more significant rise as the CBN’s bond issuance began to impact. From September 6 to September 9, reserves surged to $36.64 billion, demonstrating strong demand for Nigeria’s dollar bond and a significant liquidity boost in the financial system.
The positive trend persisted into the following week, with reserves rising to $36.73 billion on September 10 and reaching $36.81 billion by September 11. The most substantial single-day increase occurred between September 11 and September 12, 2024, when reserves jumped by $54.4 million to end at $36.87 billion.
ANALYSIS
There was a significant increase in Nigeria’s foreign exchange reserves due to a successful domestic bond sale. Foreign exchange reserves are the funds held by a country’s central bank in foreign currencies. A rise in these reserves is generally a positive sign as it reflects increased financial stability and liquidity.
The increase occurred in small, steady increments over ten days, with a notable surge following the bond sale. The data shows that the CBN’s strategy to issue a dollar bond successfully attracted substantial investment, thus improving Nigeria’s foreign exchange reserves. This increase can help stabilize the country’s economy and improve its financial health.
