Nigeria’s FX Reserves Plummet by $1.02 Billion in 18 Days


Nigeria’s foreign exchange (FX) reserves have experienced a significant decline of $1.02 billion within just 18 days, according to data from the Central Bank of Nigeria (CBN). The reserves dropped from $34.45 billion on March 18 to $33.43 billion on April 4.

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The downward trend continued with the reserves falling to $34.39 billion on March 19, $34.32 billion on March 20, and $34.26 billion on March 21. By March 26, the reserves further declined to $33.95 billion, continuing downwards to $33.57 billion on April 2.

Between April 3 and April 4, there was a decrease of $8 million, bringing the total decline to $1.02 billion within the 18-day period. These reductions occurred despite efforts by the CBN, led by Olayemi Cardoso, to enhance liquidity in the FX market and stabilize the naira.

The CBN has implemented various policies since the beginning of the year to improve the FX market and strengthen the naira, including occasional sales of dollars to bureau de change (BDC) operators to ensure liquidity. Despite these interventions, challenges persist due to limited inflows and ongoing naira depreciation against the US dollar.

Charles Abuede, research lead at Cowry Asset Management Limited, explained that the depletion of reserves is attributed to weekly and monthly interventions in the FX market to stabilize the local currency amid increasing volatility. Despite efforts to attract foreign exchange and implement reforms, challenges remain, impacting the stability of the economy and international trade.

While there have been some positive results from the reforms, such as a narrowing gap between official and parallel market rates, Nigeria’s reserves experienced a nearly 2 percent dip since June 2023 following the FX unification exercise by the central bank.

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Godwin Okafor
Godwin Okafor
Godwin Okafor is a veteran Financial Journalist, Internet Social Entrepreneur, and the visionary Founder of Naija247news Media Limited. With an extensive career spanning over 16 years in financial journalism, Godwin possesses a wealth of experience that seamlessly bridges both traditional and digital media landscapes. His journey in journalism commenced at Business Day, Nigeria, where he laid the foundation for his prolific career. In 2010, Godwin took a bold step by founding Naija247news Media, a platform that has since become a prominent player in delivering timely and accurate news. Educationally, Godwin Okafor holds a Bachelor's degree in Industrial Relations and Personnel Management from the prestigious Lagos State University, Ojo, Lagos. His commitment to continuous learning led him to the Lagos Business School, where he further honed his skills. Additionally, he is recognized as a Fellow of the University of Pennsylvania, having successfully completed the Wharton Seminar for Business Journalists. Throughout his illustrious career, Godwin has earned acclaim by winning numerous journalism awards, a testament to his dedication to excellence in reporting. Beyond his role as a Financial Journalist, Godwin Okafor wears the hat of the Chairman at Emmerich Resources Limited, the publishing entity behind Naija247news. His visionary leadership has played a pivotal role in shaping the media landscape and establishing Naija247news as a trusted source of information. Godwin Okafor's multifaceted expertise, commitment to journalistic integrity, and leadership in the realm of business journalism underscore his influential presence in both the media and entrepreneurial spheres.

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