External Reserves Drops by $190 Million in Eight Days as CBN Launches Forex Initiative

External Reserves Drops by $190 Million in Eight Days as CBN Launches Forex Initiative

  • Nigeria's External reserves has fallen by $190 million in eight days after a slight increase in April this year
  • According to the CBN, the External Reserves gained $243.83 million in 19 days from 39.54 billion in April
  • The CBN governor stated that the Bankers' Committee has launched a Forex programme to move Nigeria from dependency in oil

Nigeria’s external reserves have fallen slightly by $196 in eight days by April 28, data obtained from the Central Bank of Nigeria says.

The Punch reports that the CBN stated that the reserves, which gained $243.83 million within 19 days from $39,54 billion on April 1, 2022, increased to $39.78 billion as of April 19 days from $39.78 billion on April 19, 2022, nosedived.

External Reserves, Emefiele, CBN
Central Bank of Nigeria's governor, Godwin Emefiele
Source: Facebook

Fluctuating External reserves

It fell by $313 million in March after beginning the month at $39.86 billion before falling again to $39.55 billion on March 30.

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The Bankers; Committee has said that the country should boost revenue from the non-oil sector to minimise the impact of the volatility of oil prices on the country’s reserves.

The Bankers’ Committee has expressed the need for the country to boost revenue from the non-oil sector to reduce the impact of volatile oil prices on the country’s reserves.

CBN's Forex repatriation initiative

The CBN governor, Godwin Emefiele and the Bankers’ Committee had launched the RT200 FX programme in order to increase forex supply in Nigeria through the non-oil sector in the next three to five years.

The CBN boss said that is announcing the Bankers’ Committee’s RT200 FX programme aimed at repatriating $200 billion in FX.

Emefiele said the RT200 FX programme is a set of procedures, plans and programmes for non-oil exports that will allow the CBN to attain its goal of $200 billion in FX repatriation in the next three to five years.

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Cordros Securities stated in its weekly economic and market update the CBN has a robust supply of FX to support the market in the short-term as inflows from the recently issued Eurobond and the IMF’s SDR.

Cordros said:

“However, foreign inflows are paramount for sustained FX liquidity over the medium term, in line with our expectation that accretion to the reserves will be weak given that crude oil production levels remain pretty low.
“Thus, FPIs which have historically supported supply levels in the IEW (53.8 per cent of FX inflows to the IEW in 2019FY) will be needed to sustain FX liquidity levels.
“Hence, we think (1) further adjustments in the NGN/USD peg closer to its fair value and (2) flexibility in the exchange rate would be significant in attracting foreign inflows back to the market.”

Nigeria foreign reserves deplete further despite oil prices

Legit.ng has reported that Nigeria’s external reserve dropped by $971.4 million in the first quarter of 2022 (Q1), the Central Bank of Nigeria (CBN) data on daily reserves’ movement has revealed.

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According to the CBN data obtained on Monday, 4 April 2022, Nigeria's reserves dropped by $39.55billion billion as at March 31, 2022, compared to $40.52billion it commenced in 2022.

This happens despite a steady increase in global oil prices within the period rising to as high as $160 per barrel.

Source: Legit.ng

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