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Nigeria’s External Reserves Fall By $1.8bn In Over 2 Months- Report

Experts attribute the decline in FX reserves to factors such as debt repayment, a significant drop in oil exports, decreased foreign investment, and increased imports.

By Johnson Atoukudu

Data from the Central Bank of Nigeria (CBN) indicates that Nigeria’s foreign exchange reserves have decreased by $1.8 billion in just 10 weeks. The reserves were $32.69 billion as of May 29, 2024, down from $34.44 billion on March 18.

This decline also marks a drop from the $36.1 billion recorded in May 2023, reflecting a steady decrease over recent months, with a total reduction of $3.4 billion since February 2024, according to PUNCH.

Experts attribute the decline in FX reserves to factors such as debt repayment, a significant drop in oil exports, decreased foreign investment, and increased imports.

The report notes that debt repayment by the CBN was $560 million in January 2024, dropping to $283.29 million in February, and $276.16 million in March 2024. Experts suggest the CBN has been using the external reserves to service foreign debts.

In May, the naira weakened despite a surge in dollar supply totaling $4.60 billion in the official foreign exchange market. By the end of May, the naira had depreciated by 5.60%, with the dollar quoted at N1,485.99, down from N1,402.67 at the start of the month, based on data from the FMDQ Securities Exchange Limited. The foreign exchange market closed May 2024 with the dollar selling at N1,470, weaker than N1,380 at the beginning of the month, highlighting the currency’s struggle to maintain its value amid fluctuating forex turnover and investor sentiment.

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