Good Morning Nigeria: Some comfort beyond the tipping point
​Some comfort beyond the tipping point
Data from the CBN show that official reserves declined by US$850m in December on a 30-day moving average basis to US$29.1bn. We have heard that the US$30bn threshold was somehow a “tipping point†and we know that the CBN’s share of the reserves is 85%. That said, there is no sign of a shift in exchange-rate policy and so we suggest why the monetary authorities feel more comfortable than we might imagine. In 2015 reserves decreased by just US$5.4bn although the average crude oil price fell by one third over the year. The CBN has made great use of administrative measures and moral suasion to constrain fx demand but has also benefited from Nigeria’s strong external balance sheet.Â
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