The nation’s foreign exchange reserves have dropped below $46 billion, available data from the Central Bank of Nigeria (CBN) showed on Wednesday.
The reserves, which stood at $47.79 billion as of July 5, fell to $45.98 billion on August 27, the lowest level in five months.
According to the CBN data, the external reserves rose from $45.65 billion on March 23 to $46.04 billion on March 26. The increase was sustained as the reserves grew up till $46.79 on May 10 from $46.75 recorded on May 9.
Thereafter, the movement in the reserves became inconsistent but reached a high of $47.79 billion on July 5 and had been on steady decline, shedding $1.81 billion in less than two months.
Last week, the National Bureau of Statistics (NBS) released the capital importation data which saw the total value of capital imported into the country between April and June this year fell by $790 million to $5.51 billion.
An analysis of the data by our correspondent showed that the value dropped by 12.53 percent, making the $790 million depreciation the highest since the first quarter of 2016 when the nation’s economy was at the brink of recession.
Analysts at FSDH Research, in a Monthly Economic and Financial Markets Outlook, attributed the drop in the nation’s foreign reserves in July which extended to August to the exits of foreign investors from the Nigerian market and the increase in demand of foreign exchange.
“The external reserves recorded persistent drawdown in July 2018. This was due to the foreign investors’ pull-back from the Nigerian market and the increase in demand at the foreign exchange market,” the analysts said.
Two days ago, the Nigerian Stock Exchange (NSE), in its monthly Domestic and Foreign Portfolio Participation in Equity Trading for July 2018, had said there was a decrease of 64.68 percent in total foreign transactions from N102.41 billion in June 2018 to N36.17 billion in July.
Meanwhile, the CBN, yesterday, injected $210 million into the inter-bank foreign exchange market to meet customers’ requests in various segments of the market.
Consequently, the naira maintained its stability, exchanging at an average of N361/$ in the Bureau De Change segment of the foreign exchange market.
The CBN Acting Director, Corporate Communications Department, Isaac Okorafor, said $100 million was offered to authorised dealers in the wholesale segment of the market, while the Small and Medium Enterprises segment received the sum of $55 million.
He said the customers requiring foreign exchange for tuition fees, medical payments and Basic Travel Allowance among others, received $55 million.
Okoroafor stressed that the apex bank would continue to intervene in the interbank foreign exchange market in line with its desire to sustain liquidity in the market and maintain stability.
Recall that the CBN had last week injected a total sum of $543.22 million and 63.21 million Chinese Yuan into the inter-bank foreign exchange market.