The foreign exchange reserves fell to $25.45 billion on August 29, down to 2.86 per cent from the previous month, Central Bank of Nigeria (CBN) latest data showed yesterday.
Dollar reserves stood at $26.20 billion at the end of July, while the CBN data showed that reserves had declined 18.9 per cent from a year ago.
However, the naira hit a fresh all-time low of N420 per dollar on the black market in chronic dollar shortages the same day Africa’s biggest economy officially slid into recession.
The local currency has been under constant pressure on the black market for months. The naira was quoted at N317.09 to the dollar on the interbank market, against a 305.5 close on Tuesday.
The foreign exchange reserves fell to $25.78 billion as at August 16, representing 2.11 per cent. The reserves position is expected to provide about five months import cover for the country.
Previous data on the reserves showed that they increased marginally by $40 million in March on a 30-day moving average basis to $27.9 billion and have continued to record marginal decline till current position.
The reserves were also at $28.33 billion at end-June 2015, compared to $34.24 billion at end-December 2014, representing a decrease of 17.3 per cent decline.
The fall in reserves was due to the sharp decline in foreign exchange inflow from the economy due to continuous decline in prices of crude oil in the international markets.
The naira has slumped 38 per cent since the CBN ended a 16-month peg of 197-199 per dollar on June 20. Foreign-exchange flows have been slow to trickle into the country since the devaluation. The dollar shortage has been exacerbated by militant attacks on oil facilities in the Niger Delta, which have sent crude production tumbling to an almost three-decade low. Nigeria relies on oil for 90 per cent of export earnings.
The CBN has been selling dollars almost daily on the interbank market to prop up the currency. The naira plunged to a record low and forward rose, suggesting that traders expect further depreciation as the economy faces dearth of dollars.
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Change dole! One naira is now equal to one dollar. Voodoo Economists? Na the change be this. Hunger and starvation now stares Nigerians in the face.
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