Nigeria’s foreign exchange reserve recorded a $481.4 million decline in January 2022 to close at $40.04 billion, following the $66.17m declines recorded in the previous month.
This is according to data obtained from the Central Bank of Nigeria (CBN).
Notably, the foreign reserve fell by 1.2 per cent in January 2022 compared to $40.52bn recorded as of 31st December 2021.
The decline in the country’s external reserve can be attributed to the continuous intervention by the Central Bank in the FX market to ensure the stability of the currency.
According to data from the CBN statistical bulletin for Q3 2021, the apex bank supplied a sum of $8.97bn in the FX market through I&E, SME, and invisible.
In the same vein, the bank supplied $1.42bn through interbank, while $2.77bn was channelled through BDC operators between January and June 2021, before the bank discontinued the sales of FX to them.
The Nigerian economy had endured an FX crunch in recent times, owing to the crash in crude oil prices in 2020 as a result of the COVIOD-19 pandemic and the downtrend in foreign investment, hereby piling pressure on the supply of FX in the country.
According to data from the National Bureau of Statistics (NBS), capital imported to Nigeria declined by 47.6 per cent year-on-year in 9-month 2021 to $4.52bn compared to $8.61bn recorded in the previous year, with foreign direct investment (FDI) only accounting for 7.55 per cent of the total.
The inability of Nigeria to meet up with crude oil production quota has also been a major hindrance in boosting FX earnings despite the rally in the global market, with oil already trading at a record high of $90 per barrel, while Nigeria’s crude supply is still below target.
IPOB blasts Okorocha over insecurity in Imo
Early in the year, it was reported that Nigeria’s external reserve received a boost of $5.15bn in 2021, bolstered by the $4bn Eurobond secured by the Federal Government in September 2021 and the $3.35bn IMF facility under the Special Drawing Rights.
The nation’s foreign reserve had gained $5.99bn in October, however, in November, the reserve lost $611.01m in value as against the previous month’s gain and a $2.76m gain in September 2021. In December 2021, the reserve dipped by $66.17m, putting the annual gain at $5.15bn. (nairametrics.com)
