Nigeria’s foreign exchange reserves have dropped by over $1 billion in the last five weeks, available data from the Central Bank of Nigeria (CBN) showed on Thursday.
The reserves, which rose to $47.798 billion on July 2, fell to $46.759 billion on August 8, the lowest level in four months.
A review of the data showed that the reserves increased from $46.753 on April 9 to $46.798 on April 10.
Thereafter, the movement in the reserves became inconsistent but reached a high of $47.798 billion on July 5 and had been on steady decline, shedding $1.039 billion to hit $46.759 billion.
On Tuesday, the CBN said it injected the sum of $210 million into the inter-bank foreign exchange (forex) Market to meet customers’ requests in various segments of the market.
The apex bank said it offered $100 million to authorised dealers in the wholesale segment of the market, while the sum of $55 million was allocated to the Small and Medium Enterprises segment
It said customers who require foreign exchange for tuition fees, medical payments and Basic Travel Allowance, among others were allocated $55 million.
The depletion in the nation’s external reserves may not be unconnected to the weekly intervention of the CBN into the foreign exchange market to ensure the stability of the Naira, and the recent drop in Brent crude price in the global market from over $80 per barrel in May to $72.35 per barrel as of August 9, 2018.
The development was on the heels of increased OPEC and Russia output and concerns that a trade dispute between US and China may affect demand of the commodity.
Oil is Nigeria’s major source of foreign exchange earnings, the sector accounted for 93.3 percent of the total export earnings of the country in the first quarter of 2018, according to the CBN.
But analysts at FSDH Research, in a monthly Economic and Financial Market Outlook released recently, said the persistent drawdown in July was due to foreign investors’ exit from the Nigerian market and the increase in demand at the foreign exchange market.
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