- Nigeria’s foreign reserves is now on a steady decline against the backdrop of the decision by Central Bank of Nigeria, CBN, to protect the Naira from depreciation.
- Looking back at the last trading day on Wednesday, September 23, the reserves had fallen to $30.485 billion, about $1.139 billion drop from this year’s peak of $31.624 billion recorded about six weeks ago, August 9.
- The dwindling trend, according to financial sector analysts, is a result of CBN’s operations in the foreign exchange market, where it tries to meet demands at a predetermined exchange rate amidst crumbling oil revenue.
- Foreign exchange market reports still shows continued excess demand which has continued to put pressure on exchange rate, while premium on parallel market continue to expand.
- Financial analysts have also attributed the outflows to recent announcement by USA investment banker, JP Morgan, that it was withdrawing Nigeria from its Government Bond Index for Emerging Markets, GBI-EM.