Nigeria’s forex reserves fall below $35bn despite oil rally

Nigeria’s foreign exchange reserves have fallen below $35 billion to the lowest point in more than two months, despite the continued rise in global oil prices.

The reserves, which had risen to a high of $36.52 billion on Jan. 25 from $35.37 billion at the end of December, declined to $34.92 billion on Mar. 3 from $35.09 billion on Feb. 26, according to the Central Bank of Nigeria.

The country’s forex reserves lost $1.1 billion in February, falling from $36.19 billion at the start of the month.

The price of crude oil, which accounts for more than 50 percent of the Nigerian government’s foreign earnings, has rising significantly in recent months. Brent simulated $78.41 ▲0.90%, the global oil price benchmark, closed on Friday at $69.36 per barrel, up from around $51 per barrel on Dec. 31.

The CBN Governor, Mr Godwin Emefiele, said recently that the drop in crude oil earnings and the associated reduction in foreign portfolio inflows significantly affected the supply of foreign exchange into Nigeria.

“In order to adjust for the decrease in the supply of foreign exchange, the naira depreciated at the official window from N305/$ to N360/$ and now hovers around N410/$,” he said at a summit in Lagos.