Data from the Central Bank of Nigeria, CBN, indicates that Nigeria’s foreign exchange reserves plummeted by $1.8billion in 10 weeks.
According to the data, the FX reserves fell to $32.69bn by May 29, 2024, from $34.44bn as of March 18.
The decline was a significant drop from the $36.1billion recorded in May 2023, and the reserves have been declining steadily over the past few months, with a total decrease of $3.4billion since February 2024.
The chunk of the drop was as result of Debt repayment, decline in oil exports, decrease in foreign investment and a rise in imports, experts had noted.
For instance, the data indicated that debt repayment recorded by the apex bank as of January 2024 stood at $560m, it reduced to $283.29m in February and then $276.16m in March 2024
Experts claim that the apex bank must have been servicing the foreign debts from the external reserves.
The naira ended the month weaker, in the month of May, despite a surge in dollar supply amounting to $4.60 billion in the official foreign exchange market.
The FX market closed for the month on Friday with the naira losing 5.60per cent as the dollar was quoted at N1,485.99, weaker than N1,402.67 quoted at the beginning of the month, according to data from the FMDQ Securities Exchange Limited.
The foreign exchange market closed for May 2024, with the dollar selling for N1,470, weaker weaker than N1,380 quoted at the beginning of the month. While the currency’s performance this week reflects a significant struggle to maintain its value amidst fluctuating forex turnover and investor sentiment.
