Nigeria's external reserves lost $2.22 billion in a sustained demand pressures in the foreign exchange market.

Data from the Central Bank of Nigeria, CBN, showed that the reserves fell to $36.96 billion in the second week of December, from August closing figure of $39.18 billion.

Meanwhile, the apex bank has highlighted four major factors behind the steady decline of the external reserves.

Highlighting how these factors impact the external reserves, the CBN,

In its Financial Stability Report for June, the CBN said: "The level of external reserves remained a key factor in the stability of the financial system. Downside risks to the external reserves include:"Low inflows from crude oil & gas revenue. The non-receipt of inflows from crude oil and gas sales despite the rise in oil prices has continued to impact negatively on accretion to the reserves. This was attributed to reduction in crude oil production, among others.

"Rising foreign loan repayment obligations. The increase in the foreign debt profile is an indication that foreign debt service payments are likely to increase, and would negatively affect the level of reserves.

"Global inflationary pressures. Global inflation is expected to remain elevated, a situation that was previously anticipated, necessitating the hike in interest rates by the Fed and other major central banks. This scenario poses a threat to reserves accretion as foreign investors move assets Fromm emerging economies to advanced economies for expected higher returns.

"Lead-up to the 2023 general elections. There is the expectation of increased foreign exchange demand pressure resulting from uncertainties surrounding the conduct of the 2023 general elections."