Friday, February 12, 2016 11:43 am
Nigeria’s forex reserves keep depleting as oil prices continue to go downhill.
Latest data published by the Central Bank shows that the reserve has plunged to $27.87 billion as at 10 February, $1.1billion less than the level the country opened with on 4 January. A year ago, Nigeria had $33.4 billion in reserve.
Oil has been Nigeria’s major foreign exchange earner and from the data, the reserve has been thinning out, indicating that inflows have been minimal.
By 1 February, the reserve stood at $28.09 billion, but nine days after, it fell to $27.873 billion, $218.356 million less, despite the tight management imposed by the apex bank.
The Bankers Committee of the Central Bank of Nigeria lamented on Thursday that the demand for forex to pay school fees and medical treatment abroad is putting a lot of strains on the country’s foreign exchange reserves.
The Director, Banking Supervision Department, CBN, Mrs Tokunbo Martins,said the demands for the two items are crowding out the demand for foreign exchange in the real sector such as manufacturing, agriculture, solid minerals among others.
She said that if left unchecked, the trend could affect the banking sector’s objective of stimulating the real sector of the economy through the provision of foreign exchange to productive sectors of the economy.
Nigeria’s Forex reserve as at 9 February has fallen to $27.89 billion, the lowest level in 11 years.
Commenting further on the pressure in the foreign exchange market, the Managing Director, Standard Chartered Bank, Mrs Bola Adesola, said there was need for Nigerians to make sacrifices and be patriotic in their activities.
“We need to focus on the real sector. That is the pain that we will need to go through today so that they would have long term development plan for the country.
“So our discussion around that is how we could prevent and reduce the crowding out of the real sector where there is increased demand on the invisibles and it is something the central bank and the bankers committee is looking at.
“The pressure on foreign exchange now from school fees abroad is significant. At what point do we begin to look inward?
“The pressure on medical is significant. At what point do we begin to look inward? And I think as Nigerians, we also need to be patriots in terms of our sentiments.
“We need to think about what do we need to sacrifice today for the long term benefit of the country and the economy and this feature significantly during our discussions,” she said.
Adesola said the decision by the banks to publish the list of those that have so far accessed foreign exchange at the official rate was done inorder to promote transparency in the foreign exchange market.