Nigeria’s gross foreign exchange reserves continued declining, reaching $36.3bn as of December 5, their lowest level since July 2012, despite the central bank’s efforts to stop their depletion, central bank data showed.
The forex reserves of Africa’s biggest oil producer have been on a downward trend since August, when the local naira currency was hit by the fall in global oil prices. Nigeria relies on oil receipts for about 70% of government revenues, so the sharp drop in oil prices poses significant risk for the country’s fiscal outlook.
According to the latest available statistics office data, Nigeria exported NGN3.27trn ($17.8bn) worth of crude oil in Q2, up 20.6% y/y.
Last month, the central bank of Nigeria stepped in and devalued the naira by 8%, as well as raised its monetary policy rate by 100bps to a new a record high of 13% in a bid to stop the depletion of foreign exchange reserves. However, the stock of forex reserves has narrowed 1.8% since November 25, when the package of measures was announced.
The current level of external reserves provides approximately 7 months of imports cover, but pressure is remaining in view of the falling oil prices, which considerably reduce the build-up of forex reserves, and capital outflows related to the expected rate hike in the US.
Related Articles
Nigeria seizes record 1-tonne cocaine shipment worth $15mn at Lagos’ Tin Can Port
Nigeria’s National Drug Law Enforcement Agency (NDLEA) has intercepted 1,000kg (1 tonne) of cocaine concealed inside a shipping container at Tin Can Island Port in Lagos, in what officials ... more
Ethiopia arrests 112 people, freezes 519 bank accounts in forex crackdown
Ethiopian authorities say they have arrested 112 people and suspended 519 bank accounts as part of a nationwide crackdown on what they describe as illegal foreign currency trading and unlicensed ... more
South Sudan’s president reverses petroleum ministry reshuffle amid heightened export security risks
South Sudan’s President Salva Kiir has dismissed the undersecretary at the Ministry of Petroleum, Chol Thon Abel, just one week after appointing him, and reinstated Deng Lual Wol to the position, ... more