A new report from Central Bank of Nigeria revealed that the nation’s external reserves have dropped to $37.1bn.
The report which was posted on Central Bank’s website, revealed that the reserves declined by $2bn within one month. Specifically, the foreign reserves declined from $39.1bn as of October 21 to $37.1bn on November 21, 2014.
Within three weeks it had fallen by $1.6bn, dropping from $39.5bn on October 14 to $37.9bn as of November 7, 2014.
The Central Bank had disclosed it would continue to defend the Naira, which has fallen six per cent so far this year due to fallen oil prices and an exit from the local debt and equity markets by offshore investors.
The Central Bank’s intervention at the interbank foreign exchange market several times last week, failed to boost the Naira. The local currency crashed from N169 to N177 on November 21. It however, closed at N173 on November 24, 2014.
The CBN had, in a bid to preserve the external reserves a few weeks ago, barred importers of certain items, including electronics and generators, from buying Dollars at the Central Bank’s official forex market called Retail Dutch Auction System.
The importers were referred to the interbank forex market for their Dollar needs by the CBN.
Industry analysts are, however, positive that the Naira will close moderately at about N170 at the interbank market by the end of the year.
Analysts believed that the demand for the Dollar had been growing while the supply was falling.
Beyond the demand for Dollars by importers, some analysts said the declining global oil prices and the uncertain outlook for the naira had sparked off panic buying of Dollars by investors.