ABUJA: Nigeria’s foreign exchange reserves fell by $619 million in one month to close at $33.873 billion as at February 5, as the Central Bank of Nigeria (CBN) continues to defend the naira.
Data gathered from the central bank showed that the country’s reserves, mainly derived from crude oil earnings stood at $34.492 billion as at January 5.
It had fallen significantly by $9.010 billion in 2014 to close at $34.495 billion as at December 30.
The CBN has continued to rely heavily on the external reserves to support the naira, which has been under pressure as a result of the falling crude oil prices.
The CBN recently attributed to the continuous pressure at the forex market to the dwindling supply of the United States dollars as well as a rise in the demand for the greenback.
Specifically, the CBN pointed out that the slide in crude oil price, which has led to a reduction of earnings to the country has also resulted to drop of US dollar inflow to Nigeria, adding that the country had spent huge assets from the foreign reserves in ensuring that the official exchange rate was maintained at its previous value of N155/$1.
The naira was last November devalued to $168 to a dollar at the official market.
The CBN Governor, Mr. Godwin Emefiele recently stressed that “the only thing that will reduce pressure on our currency is by producing those things we are importing.”
“We will try as much as possible not to hurt your business, but we need to be able to work together,” he added.
According to the CBN Governor, the speculative demand for the greenback observed in the foreign exchange market is hurting the naira.
“We are not going to ban the importation of rice, but we are going to say we would no longer provide foreign exchange if you want to import rice into this country. If you want to use your dollars that you got from somewhere else to import rice, no problem!
“But with the way we are going, we would not allocate foreign exchange for you to import rice. The same way we would graduate it to other products.
“We have seen the pressure in the forex market arising mostly for the lopsided dependent on imports. Today in Nigeria, toothpick, tomato paste, furniture, rice, sugar, fish, petroleum products are all being imported into Nigeria,” he added.
