By Abiola Olawale
Data from the Central Bank of Nigeria (CBN) has revealed that Nigeria’s foreign exchange reserves experienced a decline of $1.8 billion over the past 10 weeks.
The Data from the apex bank further indicated that as of May 29, 2024, Nigeria’s foreign exchange reserves stood at $32.69 billion, a substantial decrease from the $34.44 billion reported as of March 18, 2024.
A close look at the data from the CBN shows that Nigeria’s foreign reserve has been experiencing a steady and consistent decline, amounting to a total drop of $3.4bn since February 2024.
While the persistent decline in foreign reserves cannot be attributed to a single factor, an economic expert who spoke with The New Diplomat eas of the view that this consistent decline might possibly be as a result of a combination of factors premised on multiple dynamics.
According to the expert, these dynamics range from debt repayment, a significant decrease in oil exports, reduced foreign investment, and an increase in imports, amongst others.
According to the data from the CBN, the debt repayment reported by the central bank in January 2024 amounted to $560 million. This figure decreased to $283.29 million in February and further decreased to $276.16 million in March 2024.
The expert pointed out that the apex bank must have been servicing the foreign debts from the external reserves.
It would be recalled also that the CBN Governor, Mr Olayemi Cardoso while speaking at the 295th Monetary Policy Committee meeting, attributed the situation mainly to debt repayment.
He explained: “What we have seen concerning shift in our reserves is the shift that you would find in any country where for example, debts are due and certain payments need to be made and they’re done because that is also part of keeping your credibility intact and other times money comes in and you know it takes the reserves up again and watches in the next couple of days, there will be an improvement.”
