Foreign Reserves Plunge To 10-year Low At $26.3billion

External reserves slide to a 10-year low of $26.387 billion as at May 31, 2016.

This is the lowest level recorded since October 2005 when it stood at $23.92 billion even as the price of brent crude hovered around $50 per barrel at the international market.

The reserves have continually dropped as the Central Bank of Nigeria continued to draw from it to defend the currency which has remained stable around N197 to the dollar at the official end but a high of N400 at the parallel market.

Year- to- date, the external reserves has declined by $2.68 billion or 9.23 per cent from $29.069 billion as at December 31, 2015, and $702.34 million or 2.6 per cent compared to $27.089 billion which it was at the end of April, 2016 to $26.387 billion.

The CBN reserves as at the end of May provides a merchandise import cover of 6.1 months and 4.4 months when services are included.

The CBN estimated in January that its monthly supply of foreign exchange for sale had slumped to $1 billion, although the spot price of Bonny Light has since recovered by 75 per cent to around $50 per barrel while output has fallen by at least 500,000 barrel per day.