Nigeria's external reserves continued its lacklustre performance since this quarter as it fell to $46.871 billion on Wednesday, its lowest value this month.
This was just as the naira also weakened to its lowest value against the United States dollar this year at the interbank segment of the forex market as it closed at N163.70 to a dollar Thursday.
Data gathered from the Central Bank of Nigeria (CBN) showed that the current position of the reserves derived mainly from the proceeds of crude oil production and sales represented a decline by $188 million or 0.4 per cent, compared to the $47.059 billion it stood as at August 1.
The foreign reserves largely hovered around $46.8 billion and $47.1 billion this month.
Although financial market analysts had predicted that the 50 per cent Cash Reserve Requirement (CRR) that was introduced for public sector funds by the CBN would support the accretion of the foreign reserves and also support naira appreciation in the short-term, this was yet to happen.
According to data gathered from the Financial Market Dealers Association (FMDA), at its current value at the interbank market, the nation's currency has shed a total of N7.03 kobo this year as against the N156.67 to a dollar it was at the beginning of the year. However, at the central bank's regulated bi-weekly forex auction, the naira maintained its value of N155.76 to a dollar. The CBN sold a total of $563.46 million at the two auctions held this week.
When contacted on the development, the Emerging Market Strategist at Standard Bank Plc, Mr. Samir Gadio, argued that it was questionable whether the CRR on public sector funds would intrinsically result in a qualitatively stronger naira because of its muted impact on market yields.
"It will rather cap the upside for dollar/naira and signal that the CBN will continue to defend exchange rate stability via direct and indirect measures as long as Governor Lamido Sanusi remains in charge (until June 2014).
"With around $47 billion of forex reserves, the central bank also has enough ammunition to supply adequate levels of dollars to corporate and, if needed, the interbank market, for some time. Additionally, the elevated Bonny Light oil price ($113.6/bbl on 22 Aug) reduces the possibility of a disorderly shift up in the exchange rate," Gadio said in a report to THISDAY.
Also, Kunle Ezun and Kenneth Asenime of the Ecobank Group, in a joint report said the naira remained under pressure due to structural imbalance between dollar supply and demand.
However, the treasurer of a bank said the country's high dependent on imported goods was putting pressure on the naira. He also argued the demand for forex by oil marketers for importation of petroleum products for the fourth quarter would further weaken the naira in the short-term.