By Modupe Gbadeyanka
Despite the price of crude oil rising at the global market, the foreign reserves of Nigeria are recording a steady decline in the past few months.
Also, with the Central Bank of Nigeria (CBN) determined to continue to defend the Naira, the reserves may continue to deplete.
According to data from the CBN website, as at Thursday, September 20, 2018, the average amount left in the nation’s external reserves stood at $44.89 billion.
Almost every week, the apex bank takes about $210 million from the reserves to support the local currency at the foreign exchange market.
This has helped to keep the Naira within the range of N359 to N360 per Dollar at the parallel market.
Another intervention is expected from the central bank on Tuesday (tomorrow), which would be disbursed to the interbank forex market to meet the demands of customers.
Lately, there have been huge appetites for forex as a result of foreign portfolio investors exiting the Nigerian market because of political tensions in the country as the 2019 general elections draw nearer.
Analysts at Business Post believe the Naira will remain stable this week at the forex market as the CBN injects another $210 million into the market.
However, this will still result in slight drop in the foreign reserves even with rising price of the Brent crude oil at the international market.
On Monday, the price of crude oil crossed the $80 per barrel mark. In the 2018 budget signed into law by President Muhammadu Buhari few months ago, the oil benchmark was pegged at $50.5 per barrel.
Crude oil remains the main source of forex earnings for Nigeria, which recorded a slight decline in its Gross Domestic Product (GDP) in the second quarter of 2018 and a rise in inflation in August 2018, the first after 18 consecutive declines.
