Forex Reserves Drop To $35.63bn, Lowest In Two Months

The nation’s foreign exchange reserves have fallen to the lowest level in more than two months, the latest data from the Central Bank of Nigeria have shown.

As of November 10, the forex reserves stood at $35.63bn, the lowest since August 24.

The reserves, which have been on a downward trajectory in recent months, declined to $35.69bn on October 28 from $35.74bn on September 30.

Amid the economic fallout of the COVID-19 pandemic, the nation’s forex reserves fell to a record low of $33.43bn on April 29.

But the reserves started rising after the International Monetary Fund disbursed $3.4bn loan under its Rapid Financing Instrument to the country to tackle the impact of the pandemic.

The CBN said in a recent report that the “external reserves are expected to lie between $29.9bn and $34.3bn at end-December 2020 (predicated on current declining oil price between $20 and $40).”

It said, “Sequel to the COVID-19 pandemic, the viability of the external sector in 2020 is expected to deteriorate, given the present worsening current account balance and depletion of external reserves driven, largely, by decelerating export receipts, particularly oil.

“Specifically, the degree of external reserves accumulation is expected to decelerate, as outflows are expected to outweigh inflows.”

The Managing Director/Chief Executive Officer, Financial Derivatives Company Limited, Mr Bismarck Rewane, said last week that with oil prices still under pressure, forex supply into the country would be further limited.

“The CBN will maintain its forex rationing stance and intensify efforts to keep the naira stable. External reserves to likely fall towards $34bn in the coming months.”