Despite recording an inflow of $595 million into the country’s foreign exchange(forex) reserves in just 72 hours as confirmed by the Central Bank of Nigeria (CBN), Nigeria’s forex reserves declined week-on week by 0.84 per cent to US$25.20 billion as at Wednesday, 07 September 2016.
The decline in reserves was in spite of a week-on-week (w-o-w) increase in global crude oil prices, especially Organization of Petroleum Exporting Countries’ (OPEC’s) reference basket price which appreciated by 6.21 per cent to US$44.61/barrel as at Thursday, 08 September.
According to CBN data, a total amount of $594,862,612 flowed into the foreign reserves between August 24, and August 29, three trading days; pushing the reserves from an 11-year low of $25,600,746,725 on Wednesday to a monthly-high of $26,195,609,337 on Monday.
Nigeria has been battling low oil prices, which had seen its foreign exchange receipt fall from about $4 billion a month to less than $500 million per month.
Similarly,as currency dealers predicted penultimate week, the Naira depreciated at the alternative market segments amid sustained pressure on foreign exchange supply in the just concluded week
At the parallel market, the Naira traded between N423.00/US$1.00 and N425.00/US$1.00 from Monday to Thursday before eventually closing the week at N424.00/US$1.00 on Friday.
Activity level at the interbank market waned compared to the week before last as the naira/dollar spot rate traded at a tight band of N314.20/US$1.00 and N314.92/US$1.00 between Monday and midweek, appreciated to N308.00/US$1.00 on Thursday and finally depreciated 0.8 per cent to settle at N310.64 to a dollar on Friday.
The Naira/USD exchange rate depreciated at the Bureau De Change and parallel market by 0.72per cent and 0.12per cent to N418/USD and N424/USD respectively.
Some currency dealers believe that the Naira will experience more pressure this week as the interbank money market remained closed till Wednesday and most street traders closed their businesses and traveled for the Eid-el-Kabir festival.
One dealer said, “This week, we expect sustenance of the bear pressure on the Naira particularly at the parallel market as greenback inflows remain weak.”