Nigeria’s foreign exchange reserve fell to $25,780,765,483 (25.78 billion) as of August 16, the lowest we have seen since 2005. The drop was down 2.11% from a month ago.
The Nations external reserves dropped below $26 billion for the first time on the 5th of August 2016 after it closed at about $25,971,610,949. In fact, the external reserves has dropped by about $480 million dollars in August alone compared to just $100 million in the whole of July.
Ironically, the current balance of $25.9 billion is worth about 80% more than what it was in Naira following the depreciation of the naira after it was floated.
The CBN has in the past few days ramped up sales of dollars at the interbank in the hope that it will create liquidity in a market that is yawning gape to swallow forex after nearly almost two years of intense rationing by the CBN.
The Naira weakened to its lowest ever at the interbank after it closed at about N362.5/$1 in midday trading. The Naira will eventually close at about N325 according to data from the CBN.
Analysts believe the external reserves could be headed to below $20 dollars by the end of the year if the prediction by the Petroleum Minister, Dr. Ibe Kachikwu ,that Nigeria will produce about 1.5mbp provided bombing continue in the creeks, comes to pass.
Nigeria is thought to require about $7 billion dollars monthly to fund its imports suggesting that the current external reserves can probably last for just about 4 months. Economist believe that a country’s external reserve position should at least be adequate to fund about 6 months of imports. Nigeria’s total import bill was valued at an averaged of about $75 billion annually between 2010 and 2015 or $6.2 billion a month.