External Reserves Fall by $915m After Naira Float

Nigeria’s external reserves dropped by $915m after the Central Bank of Nigeria officially floated the naira and liberalised the foreign exchange market.

CBN data obtained on Sunday showed that the reserves, which stood at $34.66bn as of June 14, 2023, when the naira was floated, fell to $33.74bn as of August 24, 2023.

The naira value had closed at 471.67/$ at the Investor & Exporter forex window on June 13, a day before the CBN announced the naira float.

Following the development, the local currency fell to over 700/$ at the I&E window.

Naira Ends Week on Negative Note

The naira has been trading at over 700/dollar since then.

At the parallel market on Saturday, the naira was bought and sold for 900/$ and 915/$.

Pounds Sterling was bought and sold for N1160 and N1180, according to Bureau de Change operators.

At the I&E window, the naira commenced trading on Friday at 773.29/$ and hit a high of 799.9/$ before closing at 778.42/$.

At the last Monetary Policy Committee meeting, the acting Governor, CBN, Mr Folashodun Shonubi, had said, “Accretion to external reserves remains weak while foreign exchange demand pressure persists.”

While noting that the apex bank would save the naira from further slides, he vowed to clamp down on operations of illegal Bureau de Change operators.

The development came after the Nigerian National Petroleum Corporation said it was taking a $3bn loan from Africa Import and Export Bank, as a temporary measure to improve dollar supply in the country.

The President of the Association of Bureau De Change Operators of Nigeria, Aminu Gwadabe, had said the CBN would be going tough on illegal operators in their efforts to stabilise the naira.

“At a sensitisation engagement between the CBN and a few of our compliance officers across the zones, the apex bank reiterated that by August 31, 2023, any breaches on the allowable margin of -2.5 per cent and +2.5  per cent on the average weighted rate of I&E closing rate, rendition of returns and payment of penalties, if any, will lead to revocation of the operating licence of the operator,” he said.