CBN defends Naira with almost $1bn in Q1, but pressure persists

The Central Bank of Nigeria (CBN) has revealed a 2.39 per cent drop in the country’s foreign reserves in the first three months of 2021.

CBN disclosed this in its latest data published on its website and obtained by Ripples Nigeria on Saturday.

According to the data, Nigeria’s reserves closed the month of March at $39.5 billion compared to $40.5 billion it opened the new year on January 4, 2021.

This indicates a $971.3 million drop with the period under review.

Ripples Nigeria understands that the decline was due to the apex bank’s ongoing intervention scheme in the country’s forex market.

For a long time, the CBN has been supplying dollars to help meet forex demands and stabilise the currency market.

READ ALSO: Naira appreciates as CBN takes out $975.7m from external reserves to defend currency

For context, the October 2021 economic data of CBN for shows as much as

as $16.7 billion was pumped into the official forex market in the first 10 months of 2021.

The highest amount during this period was in June 2021 where CBN committed a total of $2.24 billion to the Investors and exporters window to help meet demands and help keep the Naira’s Value.

Despite this huge commitment, there is still a huge gap between the forex demanded and what is currently available in the market.

Some banks recently announced the reduction of the monthly spending limit to $20 from $100, while some temporarily suspended the usage of the naira-denominated debit cards for international transactions.

In April 2015, the spending limit on naira-denominated cards for international transactions was $50,000 per person per annum or $4,166.7 per month.

“Please be informed that the monthly spend limit for international transactions on your naira-denominated debit card has been temporarily suspended. Alternatively, you can enjoy higher daily transaction limits by using our foreign currency denominated debit card, which is available in US dollar, pounds and euro variants,” Ecobank said in a note to its customers.

Also, Zenith Bank Plc had on March 10 announced that it had temporarily suspended the use of its naira card for international ATM cash withdrawals and PoS transactions.

Join the conversation

Opinions

Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now