New Telegraph

External reserves sustain slide, drop to $34.95bn

The country’s external reserves fell by $142.64 million to $34.95 billion as of June 5, 2023 from $35.09 billion on May 30, their lowest level since September 2021, according to data obtained from the Central Bank of Nigeria (CBN).

New Telegraph’s analysis of the apex bank’s data indicates that although the reserves rose to $35.19 billion as of May 19, 2023, they have generally maintained a downward trend in recent months.
For instance, standing at $36.99 billion as of the end of January, 1, 2023, the reserves fell to $35.53 billion as of the end of the first quarter.
Analysts believe that the drop in oil prices as well as interventions by the CBN in the forex market in its bid to meet surging demand for dollars have resulted in low accretion to the external reserves.

At the Monetary Policy Committee (MPC) meeting in March, the Governor of the CBN, Mr. Godwin Emefiele, attributed the decline in the external reserves to the fall in crude oil price.
“The committee, however, noted the marginal decline in the level of gross external reserves to $36.13 billion in February 2023, from $36.4 billion in January 2023, a decrease of 0.7 per cent, reflecting the downtrend in crude oil prices, as global uncertainties persist,” he said.

According to CBN data, the external reserves fell by $3.43 billion in 2022, from $40.52 billion as of the end of December 31, 2021, to $37.09 billion as of the end of December 29, 2022.
Citing CBN data, New Telegraph recently reported that foreign exchange inflow into the country’s economy fell by $25.33 billion or 26.69 per cent to $69.54 billion in 2022 from $94.87 billion in the preceding year.

According to the report, while foreign exchange inflow increased from $82.02 billion in 2020 to $94.87 billion in 2021, it generally headed south last year.
Specifically, although forex inflow rose from $17.62 billion in Q1’ 2022 to $20.08 billion in Q2, it fell to $17.22 billion and $14.62 billion in the third and fourth quarters respectively.
As part of its efforts to boost forex inflow, the CBN has in the last few years introduced several programmes and initiatives including the RT200 FX Programme launched in February last year to boost forex supply in the country through the non-oil sector in the next three to five years.

Speaking at the third edition of the biannual RT200 Non-Oil Export Summit held in Lagos, on May 9, Emefiele said that the CBN was pleased with the progress made in export proceeds repatriation since the inception of the RT 200 programme and urged non-oil exporters who are yet to embrace the programme, to do so in order to help the country achieve export diversification.

The CBN governor stated: “I am happy to note that the RT200 programme has made good progress in export proceeds repatriation since its establishment in February 2022. Available data shows that repatriation due to the programme increased by 40 per cent from $3.0 billion in 2021 to $5.6 billion at the end of 2022.

“The momentum for 2023 is equally showing strong numbers and impressive prospects. In the first quarter of 2023, a total of $1.7 billion was repatriated to the economy while about $790 million was sold at the I&E window year-to-date.”

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