Foreign Reserves Fall as Naira Weakens Further

By Modupe Gbadeyanka

There seems to be more trouble for Nigeria as its foreign reserves fell to a two-week low and the Naira depreciated further at the parallel market on Friday to N390 per Dollar.

According to Reuters, the black market Naira rate, on Friday, which has firmed 17 percent since for some weeks due to Dollar sales by the Central Bank of Nigeria (CBN) on the official market aimed at narrowing the spread, eased by 1.8 percent.

The CBN has been selling the Dollars on the official market in order to narrow the spread with the black market rate, which was quoted at a record low of N520 per dollar few weeks ago.

It was gathered that the international reserves, which have risen by 16.1 percent since the start of the year, stood at $30.29 billion by March 29, but are still far off their peak of $64 billion, hit in August 2008.

It was gathered that the reserves are being affected by the recent drop in the price of crude oil in the international market.

Oil is still the major source of forex for Nigeria, though the President Muhammadu Buhari administration is making efforts to diversify the economy and make agriculture the country’s next oil like in the past.

The central bank has been taking from the reserves to pump into the foreign exchange market in a bid to give the Naira more flesh.