Business Why Nigeria's External Reserves Fell By $494m in 3 Weeks

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Nigeria’s external reserves, which have been on a downward slide since May 5, 2017, fell to $30.5 billion on May 25, indicating a decline of $494 million in 21 days, data on the Central Bank of Nigeria (CBN)’s website showed yesterday.

The reserves have been rising steadily since March 28, moving from $30.3 billion to $30.988 billion as at May 4

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The steady decline in the external reserves comes even as analysts at Financial Derivatives Company Ltd stated in a note issued at the weekend that: “We expect a further slowdown in the pace of accretion of external reserves, as forward contracts mature, and oil prices remain below $52pb.”

According to the analysts, external reserves of $30.49 billion will cover imports for a period of 6.83 months.

Analysts attribute the steady fall in the reserves to CBN’s aggressive interventions in the foreign exchange market aimed at boosting naira and stabilising the exchange rate.
 
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