Nigeria’s Foreign Reserves Drop By $400m As Naira Depreciates Further

Nigeria’s foreign reserves shed $400m in January according to data from the Central Bank of Nigeria.

The reserves declined by 0.98 per cent from $40.52bn recorded at the close of 2021 to $40.11bn in January 2022.

Nigeria’s reserves grew to $40,520,531,730 by December 31, 2021.

The inflow represents a 14.5 per cent growth or an equivalent of $5,146,616,517 when compared to the $35,373,915,213 held as of December 31, 2020.

The fall recorded in January was associated with the forex interventions of the CBN through the Investors and Exporters segment of the foreign exchange window.

To save pressure on the reserves, the abex bank last year discontinued its $20,000 weekly Forex sales to 5,500 Bureaux De Change operators, costing it an average of $5.72bn yearly.

Apart from declining reserves, the naira has also plunged at the official window from N413.49 to N416.26 per dollar by the end of January.

The decrease amounts to a N2.77 drop or 0.66 per cent drop in the 31 days of January 2021.

The CBN had in May last year devalued the naira from N379 to N411.00 per dollar after adopting the Investors and Exporters window rate, also known as Nafex rate.

“External reserves will go down to $30bn coming out to support the currency and the exchange rate deferential will drop from all the way and begin to converge,” the Chief Executive Officer of Financial Derivatives Company, Bismarck Rewane projected in the Nigeria Economic Outlook 2022.