FOREIGN RESERVES DOWN BY $1.6B IN TWO WEEKS

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Nigeria’s foreign reserves plummeted to $32,306,782,665 at the close of business on Thursday, February 19, 2015. This indicates a cumulative daily drop of $1.6 billion when compared to $33,872,897,637 recorded two weeks ago on February 5, 2015.
A week earlier, the nation’s reserves had fallen by a total of $692 million, dropping from the level registered on February 5, to $33,181,396,894 as at the end of business on February 12, reflecting a fall of about 79 per cent during the period.
On the average, the nation’s foreign reserves witnessed a daily bashing of about $114 million in the last two weeks, according to the Central Bank of Nigeria (CBN) statistics.
The unrestrained downward movement of the country’s reserves has been a major cause for concern in recent times.
Nigeria’s foreign reserves which showed signs of improvement earlier in January, later took a bashing, dropping by a total of $44 million during the month.
However, before then, the nation’s reserves had swelled from $34.491 billion January 12 to $34.508 billion, $34.510 billion the following day.
Earlier in January this year, Nigeria’s foreign reserves, in a dramatic turn of event, rose by $44.7 million, the first in more than three months.
The country’s reserves which stood at $34.468 billion at the end of December 2014 had increased to $34.513 billion as at January 6 this year.
This was not the first time Nigeria’s foreign reserves had risen this year, as it stood at $34.493 billion after increasing by $23 million from the end of year’s level.
The CBN Governor, Godwin Emefiele, had disclosed that the bank had spent a huge chunk of the external reserves in defending the Naira from falling, adding that the best thing to do was to devalue it.
The governor said: “The CBN took the decision that it would be sub-optimal to continue to heavily deplete the country’s reserves in defending the Naira. This decision was appropriate because neither the Central Bank nor the Federal Government is in control of the major factors causing the depreciation of the nation’s currency.
Last week, the apex bank closed the Retail Dutch Auction System (RDAS) and Wholesale Dutch Auction System (WDAS /WDAS) forex window in order to save the Naira, saying that henceforth, all demand for foreign exchange should be channeled to the interbank foreign exchange market.
Source: Daily Independent

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