Nigeria’s External Reserves Drop To $26.42bn

Nigeria’s external reserves fell by 2.65 per cent to $26.42bn on May 27, the Central Bank of Nigeria statistics showed on Tuesday.

The reserves stood at $27.15bn a month ago.

The foreign exchange reserves have dropped by over 10 per cent from last year when they were at $29.7bn.

The global plunge in oil prices has caused the reserves to be depleting very fast. The development has forced the CBN to introduce foreign exchange controls, which have frustrated businesses and caused the economy to contract.

The CBN’s Monetary Policy Committee had last Tuesday announced plans to adopt a flexible exchange rate policy as the external reserves fell to $26.56bn as of May 23.

Investors, businesses and stakeholders in the economy are passionately awaiting the details of this plan, which the CBN hopes to release soon.

The external reserves had lost over $2bn dollar this year.

Nigeria recorded a balance of payments deficit of 1.4 per cent in its Gross Domestic Product at the end of 2015, owing largely to its first current account deficit (three per cent of the GDP) in over a decade.

As a result, external reserves dropped by $6bn to $28.4bn in December 2015, Moody’s Rating said in a report recently.