Foreign exchange reserves fell 11.7 per cent to $25.72 billion by December 28, from $29.13 billion a year earlier, Central Bank of Nigeria (CBN) data showed on Friday.
However, the reserves showed a 4.2 per cent increase month-on-month, up from $24.69 billion on November 28 – due to a slight recovery in global oil prices and a rise in the OPEC member’s oil production levels.
Nigeria’s oil production rose to 1.70 million barrels per day (mbpd) in November, up from 1.65 mbpd the previous month, which lifted the forex reserves.
The foreign exchange reserves fell to $25.78 billion as of August 16, representing 2.11 per cent plunge from a month ago. The reserves position is expected to provide about five months import cover for the country.
Previous data on the reserves showed that they increased marginally by $40 million in March on a 30-day moving average basis to $27.9 billion and have continued to record marginal decline till current position.
The reserves were also at $28.33 billion at end-June 2015, compared with $34.24 billion at end-December 2014, representing a decrease of 17.3 per cent decline.
The fall in reserves was due to the sharp decline in foreign exchange inflow from in the economy due to continuous decline in prices of crude oil in the international markets.
Meanwhile, the naira is set to witness another round of decline against the dollar in the days ahead as an increase in dollar flows from Nigerians living abroad coming home for holidays fell short of expectations, traders said.
The local currency was quoted at 490 to the dollar on Thursday from 495 against the dollar last week on the parallel market.
In the official interbank window, the naira was quoted at 310.25 to the dollar on Thursday, but it was expected to close at around 305.5, the same level it has traded at since August.
“We see the naira depreciating against the dollar by the time more businesses resume operations next week after the festive season as dollar liquidity remains thin in the market,” one currency dealer said. (The Nation)