Nigeria’s Foreign Reserves Target of $50 billion Suffers Setback as Balance Drops by $260 million

• Nigeria’s foreign exchange reserves dipped by $260 million to $46.81 billion as at August 7, 2018.

• This is the lowest drop in four months.

• The depletion cuts short the $50 billion projection set by the Central Bank.

Nigeria’s foreign exchange reserves dipped by $260 million in the first seven days of August 2018, according to Central bank of Nigeria (CBN) data seen by Business Insider Sub-Saharan Africa.

The data showed that the country’s reserve dropped from $47.07 billion on August 1, 2018, to $46.81 billion on August 7, 2018, the lowest in four months.

The depletion of Africa’s largest economy reserves cut short the $50 billion projection mark set by the Central Bank of Nigeria (CBN) to be achieved before the end of 2018.

In May 2018, the reserves climbed the highest at $47.86 billion but made its first decline on May 14 slipping to $47.79 billion, according to an earlier report by Business Insider SSA.

Analysts at FSDH Merchant Bank Limited say persistent drawdown was due to foreign investors’ pull-back from the Nigerian market and the increase in demand at the foreign exchange market.

In its August 2018 Economic and Financial Market Outlook, FSDH Research notes that the Nigerian economy is overly dependent on crude oil, which presents a significant downside risk.