An increase in the US Interest rate is one of the causes of the continuous drop in Nigeria’s foreign reserves, according to the Director of the Corporate Communications Department, Central Bank of Nigeria, Isaac Okorafor. Between May 2018 and September 27, 2018, Nigeria’s foreign reserves dropped by $3.485bn in value. As a result of this, capital flows into the country are experiencing a reversal.
“As a result of this, investments in the emerging and some frontier markets are gravitating towards the United States’ market to reap higher returns. There’s also the factor of election circle,” he said while speaking to journalists from the Guardian newspaper.
Despite this, analysts believe Nigeria is doing better than other emerging economies, considering that Nigeria’s exchange rate has remained the same despite the reduced foreign reserves.
Below is the Ventures Africa Weekly Economic Index, for the week ending 5th of October 2018. This economic index gives you a glimpse into other recent activities in Nigeria’s economy as well as changes and prices that could affect the economy:
Nigerian Stock Exchange
Data released by the Nigerian Stock Exchange (NSE), as of 5th October 2018, showed that the All-Share Index depreciated by 1.17 percent from the previous week ending 28th September 2018. Market capitalization at the close of trading during the week under review was N11.822 trillion, a 1.17 percent decrease from N11.962 trillion recorded the previous week. The All Share-Index for the week under review closed at N32,383.15
Top five price gainers and decliners in the week under review:
Top five price gainers
Japaul Oil & Maritime Services Plc
AIICO Insurance Plc.
Top five price decliners
Niger Insurance Plc
Law Union and Rock INS. Plc
Neimeth International Pharmaceuticals Plc.
UACN Property Development Company Plc.
Royal Exchange Plc.
How did the Naira fare?
The Naira appreciated from the 364.37 Naira recorded on the 28th of September to 362.75 Naira to a dollar on the 5th of October 2018.
How did the price of oil fare?
Brent oil prices rose from $82.1 per barrel on the 28th of September to $84.43 per barrel on the 5th of October 2018, continuing its upward trend, after it hit a four-year high late last month. Analysts say oil prices will continue to increase this week, amidst supply concerns from Iran as the United States fully implements its sanctions on the Gulf nation in November.