External reserves fall to $610m in Nov., as CBN battles to save naira

The nation’s external reserves fell by $610m last month, figures obtained from the Central Bank of Nigeria on Thursday revealed.

The reserves dropped to N$41.22bn as of November 29 from $41.83bn on October 29.

The CBN also disclosed that at the present level, the external reserves could meet the country’s nine-month import demand.

Figures obtained from the apex bank showed that the reserves, which had gained $5bn in October, returned to a downward path in November.

The reserves increased from $36.78bn on September 30 to $41.83bn as of October 29.

The Governor, CBN, Godwin Emefiele, said, at the Chartered Institute of Bankers of Nigeria’s dinner in Lagos, said, “Supported by our demand management policy, in addition to support from the successful issuance of the $4bn Eurobond and the IMF SDR, our external reserves today stands at over $41.4bn, which is enough to support nine months of imports.

“This is not just a morale booster for both foreign direct and portfolio investors willing to invest in the economy, but it provides significant fire power to support our domestic industries that need to import critical machines and equipment for domestic production and exports.”

He said as a result of the drop in foreign exchange supply arising from low earnings from the sale of crude oil, the naira depreciated by 7.7 per cent from N380/$ to 410/$ at the I & E window.

Emefiele said supply was also affected by massive outflow of foreign portfolio investments from emerging and frontier markets, including Nigeria in 2020.

“A combination of these factors led to a marked drop in our foreign reserves from nearly $36.7bn at the beginning of the crises in March said to a low of $32.9bn in June 2021,” he said.

He said the volume of activities at the I&E window fell from nearly $250m- $300m daily to less than $40m in the first quarter of 2021.