Foreign Reserves Dip By $230 Million In 16 Days

Nigeria’s foreign reserves have in 16 days dipped to $36.334 billion, a $230 million decrease from $36.572 billion recorded in the first day of June 2020, according to data from the Central Bank of Nigeria (CBN).

Details of the data by the apex bank revealed  that the reserves as of June 16, had already decreased to  $36.334 billion, representing a 0.6% fall.

The reserves had been affected by the fall  in global oil prices which fell below $20 per barrel, but the prices  rebounded to  over $40 per barrel in the first half of June, following OPEC+ push for stability in prices.

Nigeria depends largely on crude oil  as a major source of foreign exchange from exports. However, the surge in crude prices led to a corresponding rise in the country’s reserves.

“The moderate recovery in crude oil prices would reduce the pressure on the external reserves and government revenue,” CBN Monetary Policy Committee had noted on May 28. 

The CBN has commenced its weekly intervention to boost the country’s under- supplied forex market at $100 million  weekly, basically for the import of “critical product,” according to the apex bank.

Experts believe that such interventions would likely have a negative impact on the reserves.

“What we will probably see is faster reserve depletion in these markets as they seek to protect their currency’s purchasing power,” Neville Mandimika and Daniel Kavishe, analysts at Rand Merchant Bank in Johannesburg, had said.