Nigeria has witnessed a significant reduction of $915 million in its external reserves subsequent to the Central Bank of Nigeria’s official decision to float the naira and open up the foreign exchange market.
According to data released by the CBN on Sunday, the country’s reserves, which were at $34.66 billion on June 14, 2023, at the time of the naira’s float, have now diminished to $33.74 billion as of August 24, 2023.
The value of the naira was marked at 471.67/$ on June 13 at the Investor & Exporter forex window, just a day before the Central Bank’s announcement of the naira’s float.
Since then, the local currency’s value has plummeted to over 700/$ at the I&E window.
In the parallel market, the naira was recently traded at 900/$ for buying and 915/$ for selling. Bureau de Change operators reported trading Pounds Sterling at N1160 for buying and N1180 for selling.
During the latest Monetary Policy Committee meeting, Mr. Folashodun Shonubi, the acting Governor of the CBN, highlighted the weak accretion to external reserves and the persistence of foreign exchange demand pressure.
He pledged to safeguard the naira against further depreciation and emphasized a crackdown on illegal Bureau de Change operators.
The decline in reserves coincided with the Nigerian National Petroleum Corporation’s announcement of securing a $3 billion loan from the Africa Import and Export Bank. The loan is intended as a temporary measure to enhance dollar supply within the nation.
Aminu Gwadabe, President of the Association of Bureau De Change Operators of Nigeria, confirmed the CBN’s intentions to impose strict measures on illicit operators in an effort to stabilize the naira.
Gwadabe revealed that the apex bank had reiterated its stance during a sensitization engagement, warning that any breaches of the allowable margin of -2.5% to +2.5% on the average weighted rate of I&E closing rate, as well as non-compliance with returns and penalties, would lead to the revocation of an operator’s license by August 31, 2023.
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