Nigeria’s FX reserve dips by $1.02b in 18 days as CBN continues to defend naira against dollar

Following the resumption of sales of dollars to Bureau De Change (BDCs) operators in a bid to defend the domestic currency against the dollar, Nigeria’s foreign exchange (FX) reserve has experienced a sharp decline of about $1.02 billion within 18 days, as the Central Bank of Nigeria (CBN) continues its aggressive defence of the naira.

As of April 4, 2024, the FX reserves stood at $33.43 billion, down from $34.45 billion on March 18, 2024, according to the latest Movement In Reserves data released by the Apex bank.

Nigeria’s foreign exchange reserve plummeted to its lowest level since February 20, 2024, when it was $33.42 billion.

The downward trend reflects a significant dent in the reserves, which have been depleting since March 18, when they peaked at $34.45 billion. The reserves dropped to $34.39 billion on March 19 and continued to fall steadily, hitting $33.57 billion by April 2, and further sliding to $33.43 billion by April 4. This marks a decline of $1.02 billion within 18 days, indicating the pressure on the reserves amid ongoing efforts to stabilize the local currency.

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This marks a decisive end to a period of steady accrual, during which the reserve witnessed a 43-day surge, accruing $1.28 billion between February 5 and March 18, 2024.

Checking the factors that led to the decline, Ripples Nigeria notes that within the 18-day period under review, the CBN had announced the complete clearance of the valid foreign exchange backlog and the sale of $10,000 foreign exchange to each Bureau De Change operator (BDC) in Nigeria at a rate of N1,251/$1.

By: Babajide Okeowo

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