Nigeria's naira reserves drop by $2.186bn in 1 month

There appears to be no end in sight for Nigeria’s sliding foreign reserves, which have fallen by a total of $2.186 billion in December, last year.

The nation’s foreign reserves, which stood at $36,682,393,745 on December 1, declined to $34,495,665,567 as at December 30, 2014.

The Central Bank of Nigeria (CBN) statistics indicate that the reserves had witnessed continuous decline every business day of the month.

Two weeks ago, the nation’s foreign reserves fell by $500 million, as it tumbled from $35,740,495,640 on December 11 to $35,196,352,296 on December 18.

This is as the local currency remained under intense pressure in the last few months following the continued fall in the global price of crude oil, which forced the CBN to devalue the naira. As of Wednesday, the Brent crude oil price was $56 per barrel but in a bid to curb the naira slide, the CBN had stopped the banks from holding their own funds in dollars. It also said that dollars bought from the interbank market could be held only for up to 48 hours.

These measures, the bank said, were meant to stop the banks from speculating on the currency. The central bank had blamed the banks partially for the continued slide in the currency.

Reuters reported that the naira was the third worst performer in Africa in 2014 against a basket of fairly liquid currencies. It followed Ghana’s cedi and Zambia’s kwacha.

Oil revenues make up 95 per cent of Nigeria’s foreign exchange and about three quarters of the Federal Government’s revenue, but only 15 per cent of the Gross Domestic Product (GDP).