Nigeria’s external reserves have shrunk by $522,525,964 in 16 days.
According to recent figures on the Central Bank of Nigeria’s (CBN) website on the 1st of March, 2021 the external reserve was $34,998,144,389 but by March 16, it had shrunk to $34,475,618,425.
Since January 25, 2021 when the reserve stood at $36,469,940,426.08, it has been on a steady decline to the current $34,475,618,425.
Between January 25 and March 16, the external reserve declining declined by $1,994,322,001.
That is a little shy of $2billion.
The CBN had recently stated the external reserve at $35bn was sufficient to finance the country’s seven months’ imports.
The rapid drop in Nigeria’s external reserve coincides with steady rise in the price of crude oil sales, which recently rose to $71 per barrel within the same period.
Some reasons have been preferred for the sharp drop in external reserves.
These include the CBN’s intervention in the forex market to stabilise the exchange rate and low foreign inflows.
It is believed the drop in the external reserve can be linked to shortages in the supply of foreign exchange brought on by a decline in the flow of forex into the country.
In addition receipts from the sale of crude oil take a while before they hit government accounts.
