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After the naira’s float, external reserves experience a decline of $915 million.

Nigeria’s foreign reserves experienced a decline of $915 million following the official floating of the naira and the liberalization of the foreign exchange market by the Central Bank of Nigeria. According to CBN data retrieved on Sunday, the reserves, which were at $34.66 billion on June 14, 2023, when the naira was floated, dropped to $33.74 billion by August 24, 2023.

On June 13, a day before the naira float announcement, the naira’s value was 471.67/$ at the Investor & Exporter forex window. However, it weakened significantly to over 700/$ after the float and has continued trading at that level. In the parallel market, the naira was bought and sold at rates of 900/$ and 915/$ on Saturday.

The British Pound Sterling was exchanged at N1160 and N1180. At the I&E window, the naira began trading at 773.29/$ on Friday, reaching a high of 799.9/$ before closing at 778.42/$.

During the recent Monetary Policy Committee meeting, the acting CBN Governor, Mr. Folashodun Shonubi, highlighted the weak increase in external reserves and ongoing pressure on foreign exchange demand. He expressed the intention to safeguard the naira against further declines and pledged to crack down on illegal Bureau de Change operators.

This development followed the Nigerian National Petroleum Corporation’s announcement of a $3 billion loan from the Africa Import and Export Bank to temporarily enhance dollar supply in the country. The President of the Association of Bureau De Change Operators of Nigeria, Aminu Gwadabe, revealed that the CBN planned to take strict actions against illegal operators to stabilize the naira. He mentioned that any violations of allowable exchange rate margins and other regulations could result in the revocation of operating licenses by August 31, 2023.

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