Latest data from Nigeria’s Central Bank have shown that the country’s external reserves dropped by $915m after the official floating of its currency, Naira.
According to data from its central bank, the reserves decreased from $34.66 billion on June 14, 2023, the day the naira was floated, to $33.74 billion on August 24, 2023.
The Investor & Exporter forex window had the naira value close at 471.67/$ on June 13, the day before the CBN announced the naira float.
Barely a week after the suspension of Nigeria’s central bank governor, Godwin Emefiele in June, reports emerged that the apex bank had given commercial banks a go-ahead to sell forex freely at a market-determined rate.
Mr Folashodun Shonubi, the acting governor of the CBN, stated at the most recent meeting of the Monetary Policy Committee that “accrual to external reserves remains weak while foreign exchange demand pressure persists.”
Shonubi pledged to crack down on the activities of illicit Bureau de Change operators and currency speculators while pointing out that the apex bank would preserve the naira from further decline.
Until the directive, Nigeria’s monetary policy has been in the spotlight as the country, for the better part of the last 8 years, ran a monetary regime that permitted multiple exchange rates which some experts argued created arbitrage that hurt the economy.
The FX shortage in the country has also been said to likely affect the price of petrol, further compounding the effects of the removal of subsidy. Recently, the oil marketers claimed that the CBN’s Importers and Exporters (I&E) official window for foreign exchange, which had a lower exchange rate of approximately N740/dollar, had remained illiquid and was unable to offer the $25 million to $30 million needed for dealers to import PMS.