Sept Foreign Reserves Slide By $1.76bn To $41.85bn

Following the unstable global oil prices, the nation’s foreign reserves dropped by $1.76bn or 96 per cent in September to $41.85bn, from the $43.61bn at the beginning of the month.

The latest figure by the Central Bank of Nigeria revealed that the foreign reserves dropped significantly in September despite the global oil prices closing stronger at $61.09 per barrel.

According to the Organisation of Petroleum Exporting Countries basket of 14 crudes, the global oil prices were between $58.76 and $65.30 per barrel.

Our correspondent gathered that the foreign exchange buffer in nine months depreciated by $1.26bn from $43.12bn to $41.85bn as of September 30, 2019.

Further findings revealed that the nation’s foreign reserves reached the $45bn mark in June when the global oil prices were around $70-$61 per barrel.

The CBN’s Monetary Policy Committee at the last meeting noted the unstable oil prices, lamenting its implications on the accretion of foreign reserves.

The MPC chaired by Mr Godwin Emefiele had called on the Federal Government to build fiscal buffers.

Analysts attributed the decline in foreign reserves to unrelenting naira assets sell-offs by offshore investors.

Analysts at Cordros Capital said, “Despite the continuous depletion of reserves amidst sell-offs by offshore investors, our estimate suggests no naira devaluation in 2019, as we believe the CBN has more than enough ammunition to sustain its naira defence. Hence, we expect the naira to remain resilient in the short to medium term.”