Nigerian Foreign Reserves slip to lowest since November 9

Nigerian foreign reserves stood at $32.99 billion at December 2, its lowest since November  9, as the Central Bank of Nigeria (CBN) struggles to sustain stability in the domestic foreign exchange market, the apex bank’s data showed yesterday.

The naira also eased against the U.S dollar yesterday to its weakest in nine weeks as robust demand for the greenback from some end-users stocking up for Christmas sales and those excluded from the official window overstretched supply.

The forex reserves of Africa’s top energy producer were at $32.96 billion a year ago, but remain under pressure from strong domestic demand for the dollar and low accretion from oil revenue.

The CBN moved its target trading band for the naira last month to +/-3 per cent around N155, from +/-3 per cent around N150 due to prolonged strong demand on available dollar which gradually eaten deep into its reserves..

Meanwhile,  the naira according to Reuters News, was trading at N162.45 to the dollar on the interbank market, weaker than N161.70 to the dollar compared to Wednesday’s close.

“Dollar inflow has thinned out in the market, while a number of people are covering their short positions, putting pressure on the available dollars,” one dealer said.

Traders said the local unit of Chevron oil is selling about $35 million to some banks later in the day, while fellow oil company Agip is also selling $27 million, but that may not be sufficient to reduce pressure in the market.