L
LequteMan
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The steady growth of Nigeria's foreign reserves has been attributed to the main reason the country's Eurobond issue was oversubscribed by 780 per cent last week, a CBN official has disclosed.
The Godwin Emefiele led administration's determination to boost the country's reserves is increasing investors' confidence in the Nigerian market, an official who accompanied the CBN governor to the US and UK for the Eurobond show said.
Following the Eurobond issue, Nigeria's foreign reserves climbed to $30.5bn from $29.5bn. The CBN also plans to increase reserves to $35 billion by the middle of this year and $40 billion by the end of the third quarter, the official said.
“With a comfortable level of FX reserves, foreign investors will be assured that once they want to take their funds out, they can do so without hindrance," ThisDay quoted him as saying.
“If you noticed, once reserves fell to as low as $21 billion, investors were not attracted to the Nigerian economy, irrespective of whether we devalued or whatever we did with the FX market.
“As long as they felt that you had insufficient reserves to meet your foreign obligations, they were not going to remain comfortable about investing in the Nigerian economy. They continued to exit the economy.
“For example, look at South Africa and Kenya which have floating exchange rates, yet they have found it difficult to attract investors. They continue to flee their economies in droves.
“However, since the International Monetary Fund (IMF) announced in November that it had approved a $12 billion standby facility for Egypt, the country has been attracting almost $300 million a month.
“What this means is that investors need to feel comfortable with your level of FX reserves and your ability to meet your obligations when they fall due.
“So instead of the CBN getting distracted by the debate over devaluation or no devaluation, it has focused on reserves accretion, which as you know help to attract investors during the Eurobond sale last week.
The Godwin Emefiele led administration's determination to boost the country's reserves is increasing investors' confidence in the Nigerian market, an official who accompanied the CBN governor to the US and UK for the Eurobond show said.
Following the Eurobond issue, Nigeria's foreign reserves climbed to $30.5bn from $29.5bn. The CBN also plans to increase reserves to $35 billion by the middle of this year and $40 billion by the end of the third quarter, the official said.
“With a comfortable level of FX reserves, foreign investors will be assured that once they want to take their funds out, they can do so without hindrance," ThisDay quoted him as saying.
“If you noticed, once reserves fell to as low as $21 billion, investors were not attracted to the Nigerian economy, irrespective of whether we devalued or whatever we did with the FX market.
“As long as they felt that you had insufficient reserves to meet your foreign obligations, they were not going to remain comfortable about investing in the Nigerian economy. They continued to exit the economy.
“For example, look at South Africa and Kenya which have floating exchange rates, yet they have found it difficult to attract investors. They continue to flee their economies in droves.
“However, since the International Monetary Fund (IMF) announced in November that it had approved a $12 billion standby facility for Egypt, the country has been attracting almost $300 million a month.
“What this means is that investors need to feel comfortable with your level of FX reserves and your ability to meet your obligations when they fall due.
“So instead of the CBN getting distracted by the debate over devaluation or no devaluation, it has focused on reserves accretion, which as you know help to attract investors during the Eurobond sale last week.
