NIGERIA’S EXTERNAL RESERVES DECLINE BY 10.86% TO $33 BILLION

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Recent data from the Central Bank of Nigeria (CBN) reveals a substantial 10.86% year-on-year decline in Nigeria’s external reserves, dropping from $37 billion in 2023 to $33 billion in the corresponding period of 2024.

Throughout December 2023, fluctuations were observed with reserves ranging between $32 billion to $33 billion. The year concluded with reserves at $32.9 billion on December 29, showing a slight increase from earlier figures.

External reserves in Nigeria are influenced by various factors such as global oil prices, trade balances, foreign exchange inflows, and governmental policies, collectively impacting the nation’s financial stability.

Economic analysts and financial experts acknowledge the critical role of these reserves in fortifying Nigeria’s economy against unforeseen economic shocks. They act as a safeguard, contributing to stable exchange rates, managing inflationary pressures, and upholding confidence in the nation’s monetary policy.

Analysts foresee potential enhancements in reserves with the anticipated AFEXIM loan inflow. Meristem analysts highlighted the significance of the loan in bolstering reserves and addressing FX market issues; emphasising the need for sustained inflows to balance the reserve.

The AFREXIM loan, while offering short-term relief, underscores the necessity for more enduring solutions to Nigeria’s FX market issues, buttressing the importance of sustained and additional FX inflows into the reserve balance.

 

 

 

 

 

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