Nigerian Newsday

The country’s foreign reserve have risen by nearly four percent this year, according to the Central Bank of Nigeria (CBN) governor, Professor Chukwuma Charles Soludo. He said in Abuja that the reserve went up from $41.96 billion in December last year to $43.43 billion in May this year, a rise of 3.6 percent.

The Bureau of National Statistics also announced that the balance of trade dipped by nearly five percent last year. Prof. Soludo said that the growth in the nation’s external reserve could finance 25 months of imports.

Soludo however noted the risk to the steady growth of reserve arising from the decline in the volume of crude oil production due to the disturbances in the Niger Delta region.

The CBN governor said that the inflation rate stayed within a single digit in the first four months of 2007 with a steady drop from 8.5 percent in December 2006 to 4.2 percent in April 2007. He expressed optimism that inflation would remain single-digit at the end of the second quarter inspite of the persistence of the pressure.

On exchange rate, Soludo noted with satisfaction, the continued stability of the Naira in the first five months of 2007 and the impact of the stability on the economy generally, particularly in locking-in inflationary expectations.

The CBN governor reaffirmed the commitment of the committee to sustain the liberalization of the foreign exchange market.

He said the introduction of CBN standing facility since December 2006, has continued to moderate the volatility in interbank rate in the first five months of 2007.

A breakdown of the inflation figures released by the Bureau showed that the trade balance for 2006 was N4.6 billion while that of 2005 was N4.8 billion. It further said there was a noticeable decline of trade value for the fourth quarter of 2006 to N1.7 billion from N2.1 billion recorded in the third quarter of the year under review.