The latest data obtained from the Central Bank of Nigeria (CBN) has revealed that Nigeria’s foreign reserve has fallen to its lowest level in 10 months.
According to the CBN, as of Monday, 8th March 2021, Nigeria’s foreign exchange reserve stood at $34.74 billion, representing a year-to-date decline of $632.9 million (1.79%)
The last time Nigeria’s reserve position was at this level was 11th May 2020, exactly 10 months ago.
The foreign reserve has recorded a steady decline despite the recent bullish run in the global oil market. Brent Crude oil topped $70 per barrel earlier in the week before it slumped back to $65.57.
However, the persistent decline in Nigeria’s external reserve position can be attributed to the intervention of the CBN in the forex market to stabilise the exchange rate.
Despite these interventions, the naira endured a series of devaluations in 2020 and is currently trading at N412/$1 in the Importers and Exporters (I&E) windows.
Analysts had attributed the drop to a number of reasons, some of which include, low foreign inflows into the country, forex market intervention and forex policies that have discouraged foreign investors.
Recall that earlier in the month, the apex bank announced the introduction of the “Naira-4-Dollar Scheme” as an incentive for senders and recipients of International Money Transfers.