Nigeria’s External Reserves Shrink by $167.2 Million in July as Naira Struggles Against Dollar

In July, Nigeria’s external reserves experienced a decline of $167.2 million, causing the naira to weaken further against the dollar. According to data from the Central Bank of Nigeria, the reserves, which stood at $34.12 billion on June 30, 2023, decreased to $33.95 billion by July 28, 2023.

During the past two weeks, the naira’s value plummeted from 820/$ to 868/$ in the parallel market on Monday. At the I&E window on the FMDQ, the naira’s trading commenced at 784.91/$, reached a peak of 830/$, and eventually closed at 756/$.

The President of the Association of Bureau De Change Operators of Nigeria, Aminu Gwadabe, expressed concern about the lack of confidence in the local currency, leading to increased forex holding positions, hoarding, and speculation. He emphasized the need to address the situation promptly, suggesting the infusion of additional foreign finance to boost liquidity.

Folashodun Shonubi, the acting Governor of the Central Bank of Nigeria, acknowledged the persistent demand pressure on the country’s exchange rate. He reassured that the bank would intervene to stabilize the market and bring the volatility under control.