Nigeria: External reserves shed 2.1% in one month

*Kemi-Adeosun, Nigeria's finance minister.

*Kemi-Adeosun, Nigeria’s finance minister.

20 August 2016, Abuja –  The nation’s external reserves fell to $25.78bn as of August 16, down by 2.11 per cent from its level a month ago, the Central Bank of Nigeria data showed on Thursday.

This came just as the CBN stepped up dollar sales to boost interbank liquidity and support the local currency.

The central bank has been selling dollars almost daily on the interbank market to prop up the currency. The naira touched an all-time low of 365.25 per dollar on Thursday.

The foreign exchange reserves had fallen marginally to $26.20bn on July 28, down from $26.32 on July 22.

On May 28, the foreign exchange reserves stood at $26.42bn; it was down by 9.2 per cent year-on-year.

During the month of July, the reserves hovered between $26.3 and $26.4bn.

Similarly, the foreign exchange reserves oscillated between $26.3 and $26.4bn in June.

The reserves had stood at the $26.4bn between May 24 and 27, after dropping to $26.5bn from $26.6bn the same month.

Between May 31 and June 7, the external reserves stood at $26.3bn, before rising back to the $26.4bn mark on June 8, a level it maintained up until June 24. On June 27, it fell back to $26.36bn.

The CBN had last month lifted its 16-month-old currency controls and auctioned about $4bn on the spot and futures market to clear a backlog of dollar demand, to help boost interbank market trading.

The reserves had dropped by over 10 per cent from last year when they were at $29.7bn.

The global plunge in oil prices has caused the reserves to be depleting very fast. The development has forced the CBN to introduce foreign exchange controls, which were abandoned last month.

The external reserves have lost over $2bn this year.

The nation recorded a balance of payments deficit of 1.4 per cent in its Gross Domestic Product at the end of 2015, owing largely to its first current account deficit (three per cent of the GDP) in over a decade.

The nation’s external reserves had reduced by $6.7bn within a period of 21 months, the Minister of Budget and National Planning, Sen. Udo Udoma, said on March 23.

 

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