Nigeria’s external reserves dwindled to $25.860 billion as at August 12, 2016, as a result of the settlement of matured obligation by the Central Bank of Nigeria, CBN.
The latest external reserves position revealed by the apex bank showed that the reserves derived mostly from the proceeds of crude oil sales crashed by 1.9 per cent or N514 million in the last one month, compared with the $26.374 billion it was as at July 12, 2016.
Following the lifting of the peg on the naira on June 20, the central bank conducted a Special Secondary Market Intervention Sales (SMIS) to clear the backlog of $4.02 billion pent-up demand for forex.
CBN said it sold $532 million on the spot market and $3.487billion in the forwards market. A breakdown of the $3.487 billion forward sales by the central bank had shown that $697 billion was for one month (1M), $1.22 billion for two months (2M) and $1.57 billion for three months (3M). Also last month, the central bank settled one-month forward contracts of $697 million.
The naira, which closed at N317.34 to the dollar on the interbank forex market on Monday has been under pressure in the forex market as complaints of scarcity of the greenback persist.
The central bank ditched its 16-month old peg on the naira in June and introduced a flexible exchange rate regime to allow the currency to trade freely on the interbank market.
However, as a result of forex scarcity in the system which had resulted to the strong volatility observed in the forex market, the banking sector intervened last week in its bid to achieve exchange rate stability.
Oil prices rose on Monday to their highest in nearly a month as speculation intensified about potential producer action to support prices in an oversupplied market. Brent crude was up $1.19, or 2.5 per cent, at $48.16 per barrel. The international benchmark futures are up about 13 per cent above the last close in July.
Crude oil prices recorded nearly 20 per cent climb in April to about $46 per barrel. OPEC crude-oil production surged by 484,000 barrels to 33.217 million a day in April, according to a Bloomberg survey.
The federal government last week said it had saved about N1.4 trillion that would have been paid as subsidy to oil marketers as a result of the successful deregulation of the downstream oil and gas sector a few months ago.