According to information collected from the Central Bank of Nigeria, foreign exchange reserves decreased by $63.62 million in January.
In its statistics on the movement of foreign reserves, the CBN disclosed that the external reserves, which stood at $37.08 billion at the end of December 2022, had decreased to $37.01 billion by January 30, 2023.
Nigeria’s foreign exchange reserves decreased by $3.43 billion in 2022, from $40.52 billion at the end of December 31, 2021.
In its January analysis titled “MPC to favour modest rate hikes in the immediate term,” Cordros Securities claimed that local currency weakening persisted.
The statement read, “Given the lack of FX reforms, increased global interest rates, and dismal macroeconomic narrative, foreign investors remain on the sidelines.
See How Much Naira Will Trade Against The Dollar, As CBN Resumes FX Sale To BDCs
“In addition, CBN’s FX supply to the different FX market segments remains significantly below pre-pandemic levels. Meanwhile, the demand for the greenback remains high as market players continue to source for FX to fulfil and clear their outstanding obligations. Consequently, since the last policy meeting, the local currency depreciated by 3.4 per cent to N461.25/$ at the official market as of 18 January 2023.
“However, given that the FX reserves remain within the CBN’s comfort level, we expect the Committee to highlight the need for the apex bank to maintain its periodic FX interventions and intensify its call to the fiscal authorities to amplify their efforts in ensuring higher crude oil production over the short-to-medium term.
“Accordingly, the Committee will likely reiterate that the CBN should address the pressures on the local currency by boosting the FX supply for productive activities.”
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