Nigeria’s reserves on a 4-day free fall

April 7, 2016 5:54 pm

The Central Bank of Nigeria (CBN) has recorded free fall in its foreign reserves for four days consecutively, after recording such rise two times in 2016.

The reserves, which lost about $40 million in March 2016, have recorded a fall of about $150 million in April alone.

The reserves fell from $27,864,604,436 on March 31 to 27,707,692,115 on Wednesday April 6, 2016, CBN figures have confirmed.

As at March 22, 2016, the foreign reserves had experienced a rise of $34.7 million in four days, rising from $27,853,597,008 on March 16 to $27,888,285,805 by March 21.

In February, the reserves had such a rise, recording a leap of $13 million while finding its way out of 11-year low positions.

The first consecutive rise started on Thursday February 24, from $27.804 billion to $27.823 billion as at February 29, surging gradually through the days in-between.

The rise was attributed to a gradual recovery in oil prices and strict restrictions of capital flow.

The recent fall is premised on the release of funds to deposit money banks and the decline in oil prices ahead of the Organisation of Petroleum Exporting Countries (OPEC) meeting billed for April 17.

After rising by $350 million in August 2015, the foreign reserves have not experienced any of such huge leaps in six months, but have seen falls to 11-year-low positions.

Speaking at TheCable devaluation debate, Adams Oshiomhole, governor of Edo state, had warned that the nation’s forex outflows vastly outweighed inflow.

“As we speak, I understand that our forex inflow is under $1 billion,” he had said.

“If you’re earning less than one billion, and your outflow remains at more than $4 billion, obviously, all other things being equal, I imagine that in one year, our foreign reserves would be zero.”

The central bank restricted access to foreign exchange all the more in January, halting sales to bureau de change operators.

As the dollar sells at N197 on the official side, the parallel market is hoisting the currency at N320 to a dollar.