External reserves drop further, lose $99m

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The nation’s foreign exchange reserves have declined further, losing $99m to close at $47.65bn on Monday, latest data from the Central Bank of Nigeria showed on Wednesday.

Industry analysts have attributed the recent decline in the external reserves to the exit of foreign portfolio investors.

It was reported on May 17 that the external reserves slipped to $47.793bn on May 14 from $47.865bn on Thursday, May 10, according to data from the CBN.

The reserves, which fell further to $47.784bn on May 16, rose to $47.799bn on May 18, but dropped to $47.754bn on May 21, the latest CBN data showed.

The decrease in the reserves balance is likely as a result of the circular issued by the CBN on Monday, stating its decision to increase the frequency of sales of forex to the BDCs.

Meanwhile, Nigeria’s overnight and open buy back rates have each reduced by 1.92 per cent.

According to data from the FMDQ, the exchange rate at the investors and exporters’ foreign exchange window as of May 30 depreciated to N362/2$ from N361/25$.

The daily turnover remained constant, while the debt balance reduced by N43bn.

The official exchange rate of the naira to the US dollar remained constant at N305.95 to $1.

“The drop in the reserves is coming from the capital outflow. The level of inflow is less than the current level of outflow. Once you see currency on the currency, it will manifest in the reserves. This is what we are seeing now that the reserves have seen two weeks of consecutive decline, which was the first in a very long time,” the Chief Executive Officer, Cowry Assets Management Limited, Mr. Johnson Chukwu, said on Tuesday.

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