Nigeria’s Reserves Depreciates by $595m in One-month as CBN Defends Naira

Nume Ekeghe

Nigeria’s foreign reserves have witnessed a decrease of $595 million in one month following the ongoing efforts by the Central Bank of Nigeria (CBN) to defend the naira through injecting liquidity.

Data obtained from the CBN showed that as of the 5th of April, 2024, the reserves stood at $33.36 billion, a decline of $595m compared to 5th of march 2023.

Starting from March 5, 2024, Nigeria’s foreign exchange reserves was at a substantial level, standing at $33.89 billion. As the month progressed, the reserves experienced fluctuations, influenced by various economic factors and market dynamics.

By March 6, 2024, the reserves had slightly decreased to $33.91 billion indicating early signs of volatility, however, by March 7, 2024, there was a further decline, with the reserves dropping to $34.11 billion.

This downward trend continued over the following days, with the reserves standing at $34.2 billion on March 8, 2024. Despite these fluctuations, the reserves stabilised briefly on March 11, 2024, reaching $34.3 billion However, this stability was short-lived, as the reserves once again dipped to $34.37 billion on March 12, 2024.

As the month progressed, the reserves continued to fluctuate, by March 15, 2024, the reserves had decreased to $34.19 billion indicating on-going volatility.

March 18, 2024, the reserves stood at $34.44 billion, showing a slight recovery from earlier declines. However, this upward trend was short-lived, as the reserves decreased once again to $34.38 billion on March 19, 2024.

Furthermore, on March 26, 2024, the reserves had further declined to $33.95 billion highlighting ongoing fluctuations. This trend continued into early April, with the reserves standing at $33.5 billion on April 3, 2024.

Finally, by April 5, 2024, Nigeria’s foreign exchange reserves reached $33.36 billion.

Nevertheless, in light of the forthcoming Afreximbank loan and recent increases in the monetary policy rate, which have attracted foreign portfolio investors, coupled with the surge in crude oil prices, it is anticipated that the reserves will receive a significant boost in the upcoming weeks.