The nation’s foreign exchange reserves have dropped below $47bn, losing $251m in the first six days of the month, data from the Central Bank of Nigeria showed on Tuesday.
The reserves, which stood at $47.119bn as of July 31, fell to $46.868bn on August 6, the lowest level in nearly four months.
The CBN data showed that the external reserves rose from $46.845bn on April 11 to $46.881bn on April 12. The reserves hit a high of $47.798bn on July 5 and had been declining since then.
Analysts at FSDH Research, in a Monthly Economic and Financial Markets Outlook released on Tuesday, noted that the external reserves recorded persistent drawdown in July.
The analysts said, “This was due to the foreign investors’ pull-back from the Nigerian market and the increase in demand at the foreign exchange market. The 30-day moving average external reserves decreased by 1.32 per cent, down from $47.79bn at end-June to $47.16bn at the end of July.
“The total inflow through the Investors’ and Exporters’ FX Window (I&E Window) between April 2017 and July 2018 stood at $34.29bn. Our analysis shows that the total inflow through the Investors and Exporters Window in July was the lowest figure recorded since August 2017. The two largest contributors to the inflow in July were $0.56bn from other corporates, and $0.54bn from Foreign Portfolio Investments.”
They added that the favourable crude oil price offered support to the accretion to the external reserves in the short-term, despite the slowdown in foreign capital inflows.
Meanwhile, the CBN has injected the sum of $210m into the interbank foreign exchange market to meet customers’ requests in various segments of the market.
According to a statement on Tuesday, the CBN offered $100m to authorised dealers in the wholesale segment of the market, while the Small and Medium Enterprises segment received the sum of $55m.
It added that customers requiring foreign exchange for invisibles such as tuition fees, medical payments and basic travel allowance, among others, were also allocated $55m.
The Acting Director, Corporate Communications Department, CBN, Mr Isaac Okorafor, said the CBN would continue to intervene in the interbank forex market in line with its quest to sustain liquidity in the market and maintain stability.
He added that the steps taken so far by the CBN in the management of forex had paid off, adding that this reflected in the reduction of the country’s import bills and accretion to foreign reserves.
The naira exchange rate remained stable in the forex market, exchanging at an average of N360 to $1 in the Bureau de Change segment of the market as of August 7.