Available data from the Central Bank of Nigeria (CBN) has shown that the country’s gross official reserves fell significantly by $717m, from $33.9bn to $33.2bn, in September 2023.
This development marked a decline compared to the previous month, which saw a modest increase of 2 million to almost $34bn.
Except for August 2023, the gross official reserves have steadily declined for 12 consecutive months.
This year alone, the reserves have decreased by roughly $3.8bn, resulting in an average monthly decline of $427m.
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The consistent decline in the gross official reserves reflects the heightened demand pressure for forex amidst a severe supply deficit.
According to ICIR, analysts say the government’s loss of money from oil theft and inability to meet the Organisation of Petroleum Exporting Countries (OPEC) quota are major problems affecting dollar supply in Nigeria.
•Naira dips further to N1,152/$ at black market
Meanwhile, stability is still not in sight for Nigeria’s currency as the naira continues its plunge against other currencies in the foreign exchange market.
Earlier yesterday, the exchange rate between the naira and dollar hit an all-time low of N999/$1, according to intra-trading data from the FMDQ where forex is sold officially via the NAFEM.
Meanwhile, early afternoon trading on the black market P2P where forex is traded unofficially via cryptocurrency indicates the exchange rate is being quoted for N1,152/$1, suggesting the exchange rate is continuing with its steady decline.
As of Tuesday, the naira had plummeted to N1,100 to the dollar on the parallel market, while it fell to N790 per dollar on the official market.
The naira had a few days weakened to an initial unprecedented level of N848.12/$1 in the official market as the Central Bank of Nigeria (CBN)’s move to a more flexible exchange rate has put a lot of pressure on the naira.
Although the 15.3 per cent exchange rate disparity between the official and black market rates is an improvement on the between 38 per cent and 18.8 per cent which was previously recorded, the higher rate at the official market (Investor & Exporters) window is going to put more pressure on businesses and the Nigerian economy.
The steady decline in the value of the naira against the US dollar poses significant economic challenges for Nigeria and its citizens.
This situation is developing, and further updates will be provided as more information becomes available.
