CEM REPORT | Pressure on forex has caused further depletion of the Nigeria’s foreign reserves to a record low of $39.097 billion as at May 11, data from the Central Bank has shown.
Nigerian foreign reserved shed $356.34 million in seven day dropping from $39.45 billion the figure stood as at May 4
The foreign reserve has consistently and steeply depleted for the last one and a half months from a record of $39.81 billion as at April 31 to the current figure which is the lowest in three months according to the data from CBN.
CEM reported earlier this month that Nigeria’s foreign reserves hit a three-year high of $42 billion in October last year and dropped by 7.14 percent, or $3 billion as February 4, 2022. By May 11, it has come down to $39.74 billion.
CBN noted in the communique from March 21 MPC meeting that the decrease of 1.95 per cent in the level of gross external reserves to US$39.44 billion as of March 17, 2022, from US$40.21 billion on January 25, 2022, reflects the duality of Nigeria’s position as an oil exporter and importer of refined petroleum products.
Bismarck Rewane, the chief executive officer of Financial Derivative Company Limited, had warned last year that the reserves would nosedive to about $32 billion as the monetary authority would require between $8 billion and $10 billion to defend the naira.
These unfavorable forecasts by some analysts point to the fact that the downward slope in country’s reserve may persist following a drop in crude export couple with heightening import of manufacturing and building material.
As reported by CEM recently, experts have continued to advocate for expanded real sector to curb dependence on importation. It is hopeful that industries like Dangote fertilizer plant, capable of bringing in USD25 billion in foreign exchange would commence full operation to strengthen our currency and improve our reserve.
It is further projected that electioneering expenses will further escalate forex demand and put further pressure on the external reserve