Foreign Reserves Now $36.95b

Nigeria’s foreign reserves grew minimally from $36,944,921,325 on December 19  to $36,953,048,723 on December 22, 2022.

The growth happened consecutively in the four days, leading up to the Christmas holidays.

The Central Bank of Nigeria (CBN) will start recording accruals into the reserves from tomorrow.

However, the December 19  to 22  accretions into the reserves are below what was received within the same period in November  2022.

In November, the account enjoyed fluctuating accretions averaging $37.1 billion till  December 5  when the reserve dropped to $36,998,943,788.

Figures gleaned from the Central Bank of Nigeria (CBN) website showed that $36,944,921,325 accrued into the foreign reserves on   December 19,  2022; $36,945,587,514 on December   20; $36,947,672,924 on December   21  and $36,953,048,723 on December 22.

On  November 21, the reserves stood at $37,193,436,291  ; $37,192,292,683 on  December 22; $37,186,524,138 on December  23; $37,181,415,906 on December  24  and $37,172,503,981 on December 25.

With the current state of the reserves, the   CBN can conveniently fund six to nine months of export credit depending on demand.

There are fears that the foreign reserves might suffer further decline after the Christmas and New Year holidays when people will be traveling back to their bases outside the country and students schooling abroad return.

CBN Governor Godwin Emefiele recently stated that “the official foreign exchange receipt from crude oil sales into our official reserves has dried up steadily from above $3 billion monthly in 2014 to an absolute zero dollars today,”

He added that “the bulk of the money in Nigeria’s foreign reserves comes from the export of gas and oil to other nations. But increasing instances of crude oil theft have hurt Nigeria’s ability to export enough crude oil. Consequently, its foreign exchange reserves are falling”.

Emefiele noted that due to the struggle by the naira as well as the increase in the demand for forex, there has been a huge decline in foreign reserves.

Contributions to the foreign reserves come from the sale of crude oil, export proceeds, foreign banknotes, deposits, bonds, treasury bills, and other foreign government securities.

The account is also made up of the country’s “Gold Tranche in the International Monetary Fund (IMF); allocation of Special Drawing Rights (SDR) made to Nigeria by the IMF, and investment by way of loans or debenture in an investment bank or development financial institutions within or outside Nigeria”.

According to the CBN, “these assets serve many purposes, but are most significantly held to ensure that a government or its agency has backup funds if their national currency rapidly devalues.”