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CBN forex intervention depletes reserves by $804.9m in one week

Nigeria’s external reserve suffered a depletion of a whopping $804.9 million within the first seven days of the new FX market operation, this much the Daily Times gathered. This massive depletion in a week of the nation’s reserve was as a result of the continued intervention of the Central Bank of Nigeria (CBN) in the new the new Foreign Exchange (FX) market.

The Apex Bank’s intervention was meant to boost liquidity in the market, through incessant sales of US Dollars on the interbank market. As at the time CBN governor, Godwin Emefiele announced the new FX market, the nation’s external reserve stood at $26.447 Billion. But as at June 27, the reserve was found to have declined to $26.367 billion at close of business.

The latest figures provided on the official website of the apex bank showed that foreign reserve as at the end of operations on Friday June 24, stood at $26.415 billion as against the $26.36 billion on June 27 this year. This makes for a whooping difference of $481.35 million in just one day of business operation. A comparison of the current statistics on the apex bank’s website showed that as at June 30, 2016, about $29.02 billion was recorded as against the $26.36 billion on June 27. This illustrates that the country’s reserves under the care of the apex bank has depreciated by $2.633 billion.

The data also proved that the balance of the nation’s reserve in 2015 of the same period, however brought the total drop of the reserves between June 26, 2015 and June 27, 2016 to a whopping $2.65 billion, with balance of $26.36 billion against the $29.02 billion.

However, the external reserve some months ago, specifically in February 2016, had dropped by 0.8 percent or $232 million from $28.091 million to $27.859 million, while in the first month of the year, January 2016, it fell by three percent or $908 million from $29.069 million to $28.161 million. The statistics further revealed that the external reserves depreciated in 2015 by 14.1 percent, moving from $34.46 billion as at December 31, 2014 to $29.069 billion as at December 31, last year. This shows that the decline was due to the fact that the level of inflow into the reserves was lower than the level of outflow during the period

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