Nigeria’s foreign exchange reserves fell by 0.89 percent to $30.49 billion on May 25, 2017 from $30.76 a month ago, the lowest level since April 18, 2017, according to data obtained at the Central Bank of Nigeria website Wednesday.
However the current levels are still higher than what it was a year ago by 15.27 percent, from $26.45 billion as at May 25, 2016.
The reserves were building up gradually after a drop in May 2016 to a high level of $30.97 billion as at May 02, 2017 only to start decelerating to the current level of $30.50 billion on May 25.Ibe Kachikwu, Minister of Petroleum and Godwin Emefiele, CBN Governor
The reserves, according to reports have grown by $4.4 billion year to date due to recovery in global oil prices and increased production from $26.09 billion at the beginning of the year and $26.45 billion a year ago.
Analysts believe the depletion in the reserves may not be unconnected with the CBN recent interventions at the official forex market, which has seen much foreign exchange liquidity, narrow the spread between the official interbank market and the parallel markets, and the naira firming at around N300 to the dollar from over N500 in recent months. The CBN is projected to have sold over $4 billion since February.
Nigeria’s economy shrank by 1.5 percent in 2016 in its first annual recession in 25 years on the back of a shortage of hard currency and
lower revenue from its dominant oil sector as world crude prices remained under pressure.
Onome Amuge is a Nigerian journalist and content writer known for his analytical and engaging reporting on business, finance, agriculture, commodities, and technology. He is currently a journalist at Business a.m., a Nigerian business-focused newspaper, where he has authored over 360 articles covering a wide range of topics including economic trends, market analysis, and policy developments.
