In One Month, Nigeria’s External Reserves Fall By $1.2B

In One Month, Nigeria’s External Reserves Fall By $1.2B

Nigeria didn’t receive good financial news from the Central Bank of Nigeria (CBN). According to the latest data by the CBN, the nation’s external reserves pool continued its downward trend. This news comes during a “continued defense of the Naira in the face of declining supply of foreign exchange by autonomous sources, just as there is a slowdown in oil revenue,” reports Business News.

On its website, the CBN states that Nigeria’s external reserves fell slightly to $47.296 billion as of July 9, from $47.377 billion on the previous day, representing a decline of about $1.159 billion in the corresponding period of June. reports Business News.

Reserves level have fallen under the $47.88 billion it leveled off the end of March 2013, during which time it was still on the upward swing, when it rose to $48.104 billion on March 11.

The next month, it peaked at $48.853 billion on April 30. Then it started a gradual descent.

Analysts at Lagos-based investment banking group, FBN Capital Limited, blamed the decrease on several factor involving the Nigerian economy like the sliding price of Nigeria’s crude oil and increasing rate of theft and spills causing billions of Naira to be lost daily.

In Good morning Nigeria the anaysts said: “The first is the Naira exchange rate, which the CBN has defended by stepping up its foreign exchange sales at auction and by direct intervention in the market. The second is the official reserves, which soared by $12 billion in the eight months to end-March but have since stabilised around US$48 billion.”

Business News reports that prior to April, when the reserves started growing at a slow pace, the nation’s reserves level increased by $1.806 billion or 4.08 per cent in the month of January, closing at $45.984 billion. The growth rate dropped to 3.5 per cent or $1.603 billion in February at which time it closed at $47.38 billion, the highest in four years, after increasing $3.206 billion or 7.25 per cent during the first two months of 2013.