Nigeria’s External reserves declined by $63.62 million in January, according to information acquired from the Central Bank of Nigeria (CBN) as the external reserves that ended December 30, 2022 at $37.08 billion declined to $37.01 billion at the end of January 30, 2023.
Nigeria’s external reserves declined by $3.43 billion in 2022, from $40.52 billion at the end of December 31, 2021. Cordros Securities wrote in its January analysis, ‘MPC to favor lower rate rises in the near term,’ that local currency weakness maintained.
It stated that, “Foreign investors remain on the sidelines given the lack of FX reforms, higher global interest rates and weak macroeconomic narrative.
“In addition, CBN’s FX supply to the different FX market segments remains significantly below pre-pandemic levels. Meanwhile, the demand for the greenback remains high as market players continue to source for FX to fulfil and clear their outstanding obligations. Consequently, since the last policy meeting, the local currency depreciated by 3.4 per cent to N461.25/$ at the official market as of 18 January 2023.
“However, given that the FX reserves remain within the CBN’s comfort level, we expect the Committee to highlight the need for the apex bank to maintain its periodic FX interventions and intensify its call to the fiscal authorities to amplify their efforts in ensuring higher crude oil production over the short-to-medium term.
“Accordingly, the Committee will likely reiterate that the CBN should address the pressures on the local currency by boosting the FX supply for productive activities.”
