For the first time in nine months, Nigeria’s foreign reserves have dropped below $39 billion as Nigeria fails to take advantage of high oil prices.
Ripples Nigeria Check on the Central Bank of Nigeria (CBN) website showed that as at 16th May 2022, Nigeria’s foreign reserves stood at $38.91 billion.
The last time Nigeria’s reserves fell below $39 billion was on Tuesday, 10th August 2021.
CBN’s effort to meet dollar demands in the country and reduce pressure on Naira has forced it to make continuous withdrawals from the reserves.
A deeper analysis of the foreign reserves further revealed that the CBN has made no deposits but has withdrawn about $892.3 million since April 21.
When further compared to $40.51 billion the reserves stood as at Friday, January 1, 2022, CBN has pulled out a total of $1.59 billion since the beginning of 2022.
At the last Monetary Policy Meeting, CBN expressed optimism that the recently launched “Race to US$200 billion in FX Repatriation” policy would improve foreign exchange supply and strengthen relative exchange rate stability.
It said, “This policy complements fiscal sector initiatives to diversify the economy and enhances the renewed focus on improving domestic economic productivity.”
On why the reserves were depleting despite high oil prices, CBN added that “Nigeria’s oil production remained below the OPEC allocation quota, with attendant consequences on fiscal revenues and external reserves.”
