Nigeria’s external reserves witnessed a significant decline, decreasing by $841.75 million between July and September 2023, according to data from the Central Bank of Nigeria (CBN). The figures, disclosed in the CBN’s report on external reserves movement, highlight a drop from $34.07 billion on July 7, 2023, to $33.23 billion as of October 5, 2023.
This decrease follows a broader trend in the first half of 2023 when external reserves fell by $2.85 billion, attributed to challenges such as external debt finance. The CBN’s previous report noted a decline from $37.07 billion on January 3, 2023, to $34.22 billion by June 26, 2023.
Monetary Policy Committee (MPC) members, as indicated in their personal statements, pointed out weak accretion to external reserves and persistent foreign exchange demand pressures as of July. Former acting Governor of the CBN, Folashodun Shonubi, emphasized that achieving stability in the foreign exchange market over the medium-term would contribute to price stability.
Shonubi further highlighted the potential positive impact of the recent removal of subsidies, anticipating that increased crude oil receipts by the government would enhance reserves, stabilize the exchange rate, and play a role in moderating inflation. The decline in external reserves underscores the ongoing economic challenges faced by Nigeria, prompting close scrutiny of monetary policies and strategies to address the various contributing factors.
