The Central Bank of Nigeria (CBN) data has revealed a $77.23 million decline in Nigeria’s external reserves for the month of December 2023.
This 0.23% decline comes as a result of the persistent foreign exchange instability that has plagued the nation.
As of December 28, 2023, the total external reserves stood at $32,892,386,111, reflecting a decrease from the beginning of the month when the figure was close to $33 billion. The liquid portion amounted to $32,164,718,095, while $727,668,016 remained inaccessible, marked as blocked reserves.
At the start of December, the external reserves reached $32,969,611,433, with $32,212,850,183 available for use and $756,761,250 blocked.
The decline marks a continuation of the trend observed since November, when the reserves were at $33,004,054,737.
Foreign exchange reserves, including cash and other assets like gold held by the central bank, play a crucial role in balancing a country’s payments, influencing the foreign exchange rate, and maintaining market confidence.
However, Nigeria has grappled with sustaining and growing its foreign reserves over the past five years, facing challenges despite efforts from the monetary policy managers.
The former CBN Governor, Godwin Emefiele, had set an ambitious target of $50 billion for the end of 2018, a goal that has remained elusive.
Fitch Ratings, in a statement dated September 6, 2023, highlighted Nigeria’s weaker net international reserve position, emphasizing the country’s external vulnerabilities.
Efforts by the government, channeled through the CBN, to stabilize the external reserves have been evident.
Despite these efforts, the external reserves’ decline underscores the challenges posed by the forex instability and the uphill battle faced by monetary authorities in maintaining a robust reserve position.
As Nigeria navigates these economic complexities, the focus remains on finding effective measures to restore and strengthen the nation’s external reserves in the face of evolving global economic dynamics.