Nigeria’s external reserves have plunged to its lowest level since April last year despite a surge in crude oil prices which has tripled global prices around the same period in 2020.
Reserves fell to $34.57bn on April 11, 2021, according to data on movement of reserves.
The fall represents a 3.12 per cent decrease compared to the $35.65bn recorded on April 11 last year.
The Central Bank of Nigeria which manages the country’s reserves have struggled since the outbreak of the pandemic in 2020 to maintain the reserves which fell below $33bn.
Nigeria’s over reliance on crude oil proceeds forming about 90 per cent of foreign exchange earnings was affected by the global crude oil glut which led to a crash in the prices of oil below $20 per barrel.
Brent Crude price early Monday sold $68.89per barrel, while WTI Crudes traded at $65.5 per barrel.
Another development which had stifled economic activities during the period was the lockdown which also affected revenues from other exports.
But the CBN introduced a policy on diaspora remittances allowing recipients receive their money in either dollar or naira.
In March this year, the bank introduced a ‘naira 4 dollar’ policy which rewards recipients of diaspora remittances with N5 for every dollar received.
The apex bank believed it would raise dollar supply in the economy to cover for the shortages and improve the value of the naira.
But amidst the reserves woe, the apex bank has been faced with the challenge of stabilising the exchange rates of the naira.
Just last Friday, the bank removed the exchange rate of N379 per $1 from its website homepage.
The Investors’ & Exporter (NAFEX) window foreign exchange rate of N
411.67 per dollar has been reportedly adopted by the apex bank.
In March, the Minister of Finance Budget and National Planning, Zainab Ahmed, said the NAFEX rate would be used by the Federal and State Government when monthly allocations are shared.