Nigeria’s external reserves, according to the Central Bank of Nigeria (CBN’s) latest report, dropped by $523m to $34.475bn as of March 16 from $34.998bn as of March 1.
The report stated that the reserves, which had continued a downward trend of recent, lost $1.1bn in February, after it dropped from $36.19bn as of February 1 fell to $35.09bn as of February 26.
Recall that CBN had recently disclosed that the country’s external reserves at $35bn was sufficient to finance the country’s seven months’ imports.
Also, when the reserves had experienced gains in the last quarter of 2020, the central bank said at $36.46bn, it could finance 8.4 months of import of goods or 6.3 months of import of goods and services.
The CBN, in its monthly economic report for the fourth quarter of 2020, said the performance of the external sector improved in the review quarter, despite the challenges of sluggish global recovery, weakened global demand, soaring second wave of the COVID-19 pandemic and tense political environment in the United States.
The banking regulator explained that an estimated overall balance of payments surplus of $0.79bn was recorded in the fourth quarter of 2020, from the $0.14bn recorded in the third quarter of 2020.
The apex bank noted that the deficit in the current account widened to $5.27bn in the review period, compared with $3.34bn in the previous quarter.
According to the CBN, “A net disposal of $2.5bn was recorded in the financial account, relative to $2.66bn in the preceding quarter.
“The external reserves at end December 2020 was $36.46bn, compared with $35.67bn at end September 2020, indicating an accretion of $0.79bn. This could finance 8.4 months of import of goods or 6.3 months of import of goods and services.”