Nigeria’s external reserves contracted by $3.17 billion or 8.23% this year as proceeds from sales of crude oil, which provides more than 90% of its foreign exchange earnings, were largely depleted by an oil crash as well as the coronavirus pandemic.
The external reserves, which opened with a balance of $38.53 billion at the beginning of the year, stood at $35.36 billion as of 30th December, data obtained from the Central Bank of Nigeria (CBN) website on Thursday showed.
Having been on a decline in recent times, the external reserves of Africa’s biggest economy were up by $380 million from $34.98 billion as of 24th December to $35.36 billion as of Wednesday.
The strain on Nigeria’s external reserves worsened between July and September even though the global economy say some easing in economic activities, the apex bank in its third quarter economic report.
The CBN added that impact of the pandemic grew stronger on global demand and supply, and commodity prices especially crude oil, causing the overall balance of payments to remain in deficit.
Nigeria’s external reserves, according to the CBN, were $35.96 billion as of third quarter end in contrast to the $35.78 billion reported at the end of the second quarter in June, a balance it said was sufficient to finance 8.4 months of goods imports only or 6.9 months of goods and services imports.
The average exchange rate at the spot market known as the Investors & Exporters forex window and the bureaux de change window fell from N386.39 to N386.60 and from N447.71 to N461.94 respectively in the third quarter.