Home Sectors BUSINESS & ECONOMY Nigeria’s External Reserve Drops By $24 Million

Nigeria’s External Reserve Drops By $24 Million

External Reserve Declines by $440m in 2 WeeksExternal Reserve Declines by $440m in 2 Weeks

Nigeria’s external reserve recorded a turnover of $24.3 million in the first week of the year to close at $40.49 billion as of 7th January 2021. This brings a decline when compared to $40.42 billion recorded as of the start of the week.

The nation’s foreign reserve had estimated an income of $5.99 billion in October, following a $2.76 million gain recorded in September 2021 as a result of the $4 billion Eurobond secured by the federal government and the $3.35 billion IMF Special Drawing Rights facility.

However, the reserve started having a decline in November after it has crossed the $41 billion mark. Nigeria’s external reserve lost $611.01 million in November, which was followed with a $666.17 million decline in December. Meanwhile, the annual gain for 2021 was $5.15 billion

The decline in the nation’s external reserve is attributed to the intervention by the apex bank in ensuring forex stability in the country.

The Investors and Exporters window (I&E) is the official market for the sale of foreign exchange in the country after the Central Bank stopped the sale of forex to BDC operators in 2021. However, a sum of $2.77 billion had been sold to the BDC operators between January and June 2021.

Given the managed floating foreign exchange system adopted by the apex bank, the CBN occasionally intervenes in the forex market to ensure they manage the volatility that could be witnessed in the market by releasing funds from the reserve.

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