Nigeria: External Reserves Drop By $1.6bn in One Month

6 August 2019

The 30-day moving average of Nigeria's foreign external reserves has dropped by $1.67 billion from $45.046 billion at the beginning of July to $44.878 billion in early August.

Statistics on the Central Bank of Nigeria (CBN) website showed that the external reserves which stood at $43.07 billion as at the beginning of the year rose to $45.04 in July but declined to $44.90 at end of July and $44.87 billion in the first week of August.

Commenting on the development, the managing director and chief executive of B. Adedipe and Associates Limited, Dr. Biodun Adedipe, stated that with a monthly import bill of N1.277 trillion (or $3.31 billion) from Q3 2018 to Q1 2019, current external reserves of $45.044 billion represents 13 months, which is above the minimum threshold of six months (it was 11 months during recession).

Despite the decline in the external reserves, the CBN has maintained its intervention in the foreign exchange with at least $210 million weekly to meet the demands of small, medium scale business owners, manufacturers, the invisible segment, tuition fees, medical payment, Basic Travel Allowance (BTA), and personal needs making the naira to remain stable at N360/$1.

The foreign exchange rate data on the CBN website showed that the naira appreciated to N306.85/$1 as at August from N306.95 at the beginning of July. The naira also appreciated against the pounds sterling and the Euro to trade at N372.17 and N350.69 from N388.23 and N348.32.

On the investors and exporters window (I&E) window, the CBN said that the naira traded at N362.57 as at the close of business yesterday with the local currency selling at an average of N364-N310.

But the data on the official website of the Association of Bureau De Change Operators of Nigeria (ABCON) showed that the naira traded at N358.5/$1, N460/1£ and N401/€1.

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