It seems that all attempts by the Central Bank of Nigeria (CBN) to shore up the country’s external reserves have failed as the reserves hit an all time low of $24.21bn in October from $25.8bn in September 2016, according to the apex bank.
The reserves had its worst fall within two weeks ending Friday October 16 2016, shedding more than $600 million within the period, making the country to lose a total of $1bn in four weeks, and described by analysts as unprecedented in the country’s history.
According to the latest data from CBN, “The reserves fell from $25.8bn on August 16 to $24.8bn on September 16, and decreased by $600m from the $25.4bn recorded on August 31 to $24.8bn on September 16.”
The development means a limited amount of dollars will be available at the official interbank market, fuelling concerns over another round of depreciation of the naira.
In its efforts to defend the naira and prevent it from falling further at the official interbank market, CBN has been selling dollars there more frequently, but naira has maintained its steady fall, exchanging for as low as 355.25 to a dollar at the interbank market on Friday.
Former president Olusegun Obasanjo recently disclosed that President Muhammed Buhari inherited about $30 billion from the last administration in May 29 2015.
An economist, Mr. Henry Moyo, in his reaction expressed concern that unless government took drastic measure to reverse the trend, Nigerian economy may totally run out of steam, a situation he said would lead to multiple economic woes.
The global plunge in oil prices caused the reserves to be depleting very fast. The development had forced the CBN to introduce foreign exchange controls, which were abandoned in June.
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