Nigeria External Reserves Decline Further

Nigeria’s external reserves continues to deplete with the 20-day moving average standing at $30.28 billion as at June 8, 2017 even as the Central Bank of Nigeria plans to mop up N1.24 trillion through the sale of treasury bills in the third quarter of the year from June 15 to August 31, according to the Treasury Bills Issuance calendar for the third quarter which it released.

While the output of crude oil which is the major foreign exchange revenue source for the country has been rising, the price of the commodity at the international market has declined to less than $50 per barrel on an increased glut.

The apex bank has also been dipping into the reserves to sustain its regular interventions at the foreign exchange market. Its target is to achieve a convergence of rates at the various windows of the forex market and ensure forex liquidity.

Its efforts are however paying off although analysts question the ability of the apex bank to sustain its interventions in the face of another decline in the price of crude oil at the international market. The value of the naira at the parallel market, the bureau de change as well as the bank has almost converged selling at N365, N362 and N360 to the dollar respectively. The value of the local currency also firmed at the Investors and Exporters window from N380 to N373 at the close of business last week Friday.

Meanwhile the CBN says over the next three months it aims to auction N226.64 billion in 91-day bills, N311.32 billion in 182-day and N698.64 billion in 364-day debt. There will also be a maturing of N1.21 trillion between June 15 and August 31.

The apex bank will this week Thursday, June 15 auction N236.66 billion worth of Treasury Bills. It plans to raise N39.006 billion through the 91 bay bill, N23.02 through the 182 day bill and N174.64 billion through the 364 day bill.