CBN naira defence depletes foreign reserves by $3.17bn

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CBN naira defence depletes foreign reserves by $3.17bn
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Forex scarcity due to falling crude oil price forced the Central Bank of Nigeria to access the country's foreign reserves to make forex available in the economy; NIKE POPOOLA reports that this gulp...

Forex scarcity due to falling crude oil price forced the Central Bank of Nigeria to access the country’s foreign reserves to make forex available in the economy;The country’s foreign reserves which stood at $38.07bn at the end of 2019 fell to $34.9bn at the end of the first quarter of 2020.

The CBN had technically devalued the naira after all interventions in the market such as imposing sanctions on errant operators and use of moral suasion to curb illegal forex operations did not sustain the exchange rate. According to him, the merger of the different rates became necessary to build confidence in the sector.

However, the foreign reserves which had been declining for many months returned to a growth path in May 2020. Emefiele, who chaired the MPC meeting, said, “Based on the current downturn in oil prices, staff projections indicate that output in 2020 would be less than earlier envisaged.

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