Connect with us

Hi, what are you looking for?


Foreign Reserves Decreased To $33.23b, Lowest Level In Two Years – CBN

Data from the Central Bank of Nigeria (CBN) show that Nigeria’s foreign exchange reserves decreased to $33.23 billion at the end of the third quarter (Q3) of 2023.

The international reserves decreased from the $38.25 billion recorded at the end of September 2022 by $5.01 billion on an annual basis.

The foreign reserves decreased by $881.84 million from quarter to quarter after ending the second quarter (Q2) at $34.11 billion.

Since President Bola Tinubu’s administration came on board on May 29, the foreign currency reserves have fallen by $1.91 billion – Muhammadu Buhari, the former president bequeathed over $35.14 billion to the new government.

The $33.23 billion external reserves reported in Q3 2023 stood as the lowest in two years – since hitting $33.22 billion on July 22, 2021.

With Nigeria’s international reserves depleting, the country’s ability to fund imports weakens, leading to forex demand exceeding supply at the official and parallel markets.

Demand surpassing supply contributes to the depreciation of the naira and raises the exchange rate.

As a result, the price of the dollar increased by N240 in the parallel market, rising from N764.3, reported at the end of June, to around N1005, at the close of the third quarter of 2023.

Although, while the naira depreciated by 31.5 percent in the open market, it inched higher by 1.8 percent in the investors’ and exporters’ (I&E) window of the official market – which is influenced by the CBN.

The official naira-to-dollar exchange rate closed Q3 2023 at N755.27, contrasting with the quarter’s opening rate of N769.25.

In a statement by Fitch Ratings on Wednesday, the credit rating agency said: “There has been a renewed divergence between the parallel market and official exchange rates since August due to limited supply of FC, reversing some of the narrowing at June’s devaluation”.

“This highlights the challenges in sustaining exchange-rate liberalisation and raises the possibility of a further devaluation.”

Meanwhile, the decline in the foreign exchange reserves also makes it difficult for the country to defend or maintain its currency during an upward trend of the dollar.

In addition, the slump in forex reserves often forced governments to seek external loans, which explains why the Nigerian National Petroleum Company (NNPC) Limited secured a $3 billion loan from the African Export-Import Bank (Afreximbank).

Last week, Abdullahi Sule, the governor of Nasarawa state, said the $3 billion loan NNPC Limited applied for would be used to stabilise the naira.


Follow us on Twitter at @thesignalng

Copyright 2023 SIGNAL. Permission to use portions of this article is granted provided appropriate credits are given to and other relevant sources.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *




The Second Prosecution Witness (PW2) in the ongoing trial of a former governor of Central Bank of Nigeria (CBN), Godwin Emefiele, Boss Mustapha, on...


There’s a mounting pressure on the federal government to make significant releases to clear the foreign airlines’ trapped funds amidst their threat to exit...


The Central Bank of Nigeria (CBN) has sacked the boards of Union Bank, Polaris Bank and Keystone Bank. The apex bank in a statement...


The Central Bank of Nigeria (CBN)’s new naira redesign strategy, according to the former Special Assistant to the immediately past President Muhammadu Buhari on...

Copyright ©