- Nigeria’s foreign exchange reserves dropped to a new low of to a new $24.88 billion according to information on the website of the CBN.
- This is the lowest we have seen in years as the CBN grapples with low liquidity at the interbank market.
- According to reports, the CBN spent about $230 million in the interbank market as it tried to intervene to bridge the liquidity gap.
- The reserves is said to have plummeted by about $1.6 billion since the introduction of the flexible exchange rate.
- The external reserves is perhaps the most watched number in the forex market as it indicates the level of supply available to meet the demand for forex in Nigeria.
- With the reserves falling unabated, the likelihood for the naira strengthening against the dollar seem remote.
- This could also be a major factor in the monetary policy meeting set for this week as the CBN is more disposed towards attracting foreign portfolio investors and may therefore raise rates again.
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