External Reserves Decline by $1.45 Billion in September

• External Reserves Decline by $1.45 Billion in September

The Nigerian foreign exchange reserves dropped another $1.457 billion in September, according to the Central Bank of Nigeria’s data published on Monday.

The external reserves declined from $45.838 billion at the end of August to $44.380 billion in September.

Data from the apex bank showed the reserves dropped from $47.11 billion in July to $46.128 billion in early August.

The central bank attributed the change in reserves to the unstable pattern of international trade, institutional changes in economy and shift in production.

Dr Sam Nzekwe, former President, Association of National Accountants of Nigeria, said foreign reserves had grown in the past because of rising global oil prices and stable production.

However, he said political uncertainty had led to capital flight as many foreign investors are now taking funds out of the country.

“So, I believe that what must have happened is that those of them whose investments are short-term like shares and bonds, have found their way out of Nigeria,” he added.

In September, the CBN led monetary policy committee left interest rate unchanged at 14 percent, citing surged in capital flight and economic uncertainty ahead of national elections.

But with the oil price projected to trade at about $90 a barrel by Christmas and $100 by the New Year, the foreign reserves might improve between the final quarter of 2018 and first quarter of 2019 if oil production remains above 1.9 million barrels per day as predicted for October.