Economy

Nigeria’s foreign reserves plunge to $38.3bn

The Central Bank of Nigeria has revealed that the nation’s external reserves at the end of September dropped to $38.318 billion signifying a 5.42% decrease.

According to the financial institution, it was gathered that the nation’s foreign reserves have dropped by $2.202 billion to $38.318 billion as of September 29, 2022, from $40.520 billion as of December 31, 2021.

Nigeria’s foreign exchange reserves have been depleted by billions of dollars despite rising oil prices this year. Last month, the country’s reserves fell by $706 million, to $39.024 billion on September 1, 2022.

According to Nairametrics, there is a lack of foreign exchange, which is causing the local currency to depreciate even more on the FX market as currency traders continue to complain about the lack of forex liquidity. Also, despite the central bank’s intervention in the forex market, there is currently a forex crisis.

While the stability of the official exchange rate has been appreciated by some, for the vast majority of Nigerians, it remains out of reach. At the time of publication, the Black market rate for the United States dollar was approximately N735.05 to $1, while the rate at the Investors and Exporters Window was N437.03 to $1.

Reacting to this, the CBN governor, Godwin Emefiele would continue its  intervention policy with the hope that the oil price surge would boost the reserves.

He said “the Committee noted the marginal increase of 0.39% in the level of external reserves to US$38.46 billion at end-August 2022 from US$38.31 billion at end-July 2022 despite continued demand pressure. With crude oil price forecast to continue to moderate in the short to medium term, Members urged the Bank not to relent on the various policies put in place to support non-oil exports to shore up external reserves.”

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