The naira dropped by 0.66per cent to N611/$1 yesterday morning from N607/$1 recorded on the previous day, findings by New Telegraph show. Also, data on FMDQ Exchange website shows that naira closed slightly weaker on Wednesday at the Investors and Exporters’ (I&E) window with a 0.05 per cent depreciation, to close at N420.5/$1 compared to N420.28/$1 recorded in the previous trading session.
The depreciation of naira at both the unofficial and official markets comes despite Nigeria’s external reserves maintaining an upward trend in the last few weeks. For instance, data published by the Central Bank of Nigeria (CBN) shows that the country’s dollar buffers gained $426.54 million between June 6 and 22, 2022.
According to the apex bank, the external reserves rose from $38.42 billion on June 6 to $38.85 billion on June 22, 2022, meaning that the reserves increased by $426.54 million. New Telegraph’s analysis of the CBN’s data indicates that after heading south for most part of April and May, the reserves inched up to $38.483.66 billion on May 31 from $38.483.59 billion on May 30. They, however, resumed their downward slide falling to $38.42 billion on June 6 2022 only to rise to $38.46 billion on June 7. Analysts believe that the reserves accretion of the last few days is the result of the price of oil (the commodity that accounts for over 70 per cent of Nigeria’s forex earnings) remaining above $120 per barrel in the last two months(it was $126.6 per barrel as of June 21 on CBN’s website).
However, while high oil prices may be having a positive impact on Nigeria’s external reserves, New Telegraph gathered that the reserves accretion reported by CBN in recent weeks was caused by the apex bank’s deliberately reducing its intervention in the forex market in its bid to conserve the dollar buffers. New Telegraph reported last month that worsening forex scarcity in the official market had compelled some deposit money banks (DMBs) to start informing their customers interested in purchasing foreign currency to meet needs such as international school fees, upkeep and rent payments, as well as Basic Travel Allowance (BTA) and Personal Travel Allowance (PTA), to submit their applications in advance. For instance, in an email titled: “Important update on FX transaction,” sent to its customers, which was sighted by this newspaper, one of the country’s Tier 1 banks said it will need a 30-day period to fulfil requests for school fees, upkeep and rent payment. The lender also stated that customers are required to submit applications for BTA/PTA 14 days before their proposed travel date.