Nigeria’s foreign exchange reserves depleted by as much as $303 million over the past six weeks, data from the Central Bank of Nigeria (CBN) has shown.

Recall that the country’s external reserves did peak at $43.2 billion by January 2019, after suffering a major setback in Q4 2018. However, the recorded success was short-lived because, the CBN data revealed how there was a free fall in the external reserve between January ending and March 2019.

According to the CBN’s data, the external reserves stood at $42.8 billion as of March 12th, 2019, representing a $303 million decline.

Recent Drop in Buffer

Over the last six weeks, the external reserve reached its highest level on January 30th when it stood at $43.2 billion. As of February 5th, 2019, it had dropped to $42.9 billion.

The drop continued by mid-February, when the external reserves stood at $42.8 billion. Notably, an all-time low for the nation’s external reserve in the last 6 weeks was February 27th, when it stood at $42.3 billion.

Freefall in external Reserves during Presidential election 

The last decline in external reserve happened by the end of February 2019. As you should know, this period coincided with the Presidential elections in Nigeria.

Between February 15th and March 4th, 2019, the external reserves had dropped by $520 million. On the 15th of February, it stood at $42.8 billion, only to drop to $42.3 billion on March 3rd, 2019.

Notably, between 22nd and 25th of February 2019, external reserves depleted by $148 million. Also, note that this period was the weekend of Nigeria’s presidential election.

In the meantime, it is beginning to rise again

The country’s reserve has relatively been on the rise. While the external reserve stood at $42.3 billion on March 3rd, it rose to $42.8 billion on the 12th of March.

Coronation Research

Factors responsible for the rise

It will be recalled that Nairametrics, last week published an article where it drew readers’ attention to the fact that Nigeria defied OPEC quota by increasing crude oil production.  

Moreso, the CBN’s recently released the balance of payment report for 2018, and it showed that foreign direct investments dropped in the last quarter of 2018. Hence, Nairametrics is of the opinion that with the fall in the prices of crude in recent months, the improvement in Nigeria’s external reserves can be traced to the increase in crude oil production in the last two months.

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