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Foreign Reserves Drop by $232m In 7 Days


Nigeria’s foreign reserves continued their downward slide, falling by $232 million in the seven day; data obtained from the Central Bank of Nigeria’s (CBN) has showed.

According to the data, the reserves, which stood at $27.54 billion as at April 11 2016, had fallen to $27.308 billion by Wednesday April 20, 2016.

It went down by $32 billion between Tuesdays 19 to Wednesday 27,340 billion.

The website shows that the reserves stood at $27.858 billion on April 1. As the reserves continued their downward slide, the amount of dollars the CBN allocates to commercial and merchant banks dropped to $177,876,814 compared with the $189,489,057 it allocated in the preceding week.

The Nigerian National Petroleum Corporation (NNPC) recently announced that International Oil Companies (IOCs) in Nigeria had agreed to provide about $200 million to help fund fuel imports as part of measures to end fuel shortage across the country.

The Minister of State for Petroleum, Mr. Emmanuel Kachikwu, was quoted by agency reports as saying, “I have been able to convince the upstream oil companies to provide foreign exchange buffers over the next one year for those who’re bringing in products.”

Total SA and Exxon Mobil Corp. will provide dollars to their local retails units, Total Nigeria Plc and Mobil Oil Nigeria Plc, while Royal Dutch Shell Plc has been paired with local oil importer Conoil Plc and Eni SpA with Oando Plc, said Kachikwu.

Companies importing fuel in Nigeria have been hindered by lack of access to foreign exchange, following the plunge in the price of oil, the main foreign income earner in Africa’s largest oil exporter.

Also, in a move, which some analysts believe will help reduce the pressure on the dollar in the forex market, the CBN and the Industrial and Commercial Bank of China Ltd (ICBC), the world’s biggest lender, signed a deal on Yuan transactions during President Muhammadu Buhari ‘s trip to China last week.

“It means that the renminbi(Yuan) is free to flow among different banks in Nigeria, and the renminbi has been included in the foreign exchange reserves of Nigeria,” Lin Songtian, Director General of the African Affairs Department of China’s foreign ministry, told reporters.

The CBN has said it plans to diversify its foreign exchange reserves away from the dollar by switching a stockpile into Yuan. It converted up to a tenth of its reserves into Yuan five years ago.