Nigeria’s External Reserve Experiences Huge Loss Of $24 Million In First Week Of 2022

The Central Bank of Nigeria (CBN) daily reserve movement has revealed that Nigeria’s external reserve dropped $24.3 million in the first week of 2022 to close at $40.49 billion as of 7th January 2021. This represents a 0.06% decline when compared to $40.42 billion recorded as of the start of the week.

Central Bank of Nigeria (CBN) data on the daily reserve movement stated that as a result of the $4 billion Eurobond secured by the federal government and the $3.35 billion IMF Special Drawing Rights facility, the nation’s foreign reserve had gained $5.99 billion in October, following a $2.76 million gain recorded in September 2021.

Nigeria’s external reserve lost $611.01 million in November after it has crossed the $41 billion mark which was followed by a $666.17 million decline in December while the annual gain for 2021 was $5.15 billion.

The intervention by the apex bank in ensuring forex stability in the country accounts for the continuous decline in the nation’s external reserve and data from the Central Bank shows that a total of $8.97 billion was supplied by the bank to the I&E window, SME, and Invisibles.

Before the Central Bank halted the sale of forex to BDC operators in mid-2021, a sum of $2.77 billion had been sold to the BDC operators between January and June 2021. Having said that, the Investors and Exporters Window (I&E) is the official market for the sale of foreign exchange in the country.

Foreign reserves international or external reserves are simply backup funds or assets held by the central bank of a country to ensure that a government or its agency has backup funds if their national currency rapidly devalues. They include foreign banknotes, deposits, bonds, treasury bills and other foreign government securities.