Posted by: Editor in Finance 0

The country’s foreign reserves have dropped to $43.7bn, one week after falling to $43.9bn, according to the latest figures from the Central Bank of Nigeria.
On December 17, the reserves fell to a one-year low of $44.19bn.
The reserves may likely close the year on the $43bn mark, financial analysts have said.
Contrary to the Federal Government’s plan to raise the country’s external reserves to $50bn by the end of 2012, they closed at $44.26bn.
It appears the reserves will be closing 2013 at about $6bn below the Federal Government’s target of $50bn for last year.
The amount in the foreign reserves as of January 2, 2013 was $44.33bn. It started rising through the year and peaked at $48.8bn on April 30.
From May, however, the reserves started falling gradually. Between May 2 and August 5, 2013, the balance in the account had fallen by $1.8bn to $46.98bn from the peak of $48.85bn.
Some analysts are of the opinion that the amount the CBN has been offering for sale at the Wholesale Dutch Auction System is fast depleting the external reserves.
The central bank had defended the naira with $18.7bn at the WDAS between April and November 4 in a bid to save the currency.
It offered $18.7bn to currency dealers in 59 auctions in the seven-month period. However, the CBN on October 2 replaced the WDAS with the Retail Dutch Auction System because of the ineffectiveness of the former in order to address hitches in the foreign exchange market.
Notwithstanding this move, observers said the CBN had, some months back, resumed direct intervention by selling dollar to end-users in the market.
The regulator took the decision in order not to devalue the naira, operators said.
According to analysts, the performance of the reserves is driven mainly by proceeds from crude oil, gas exports and crude oil-related taxes as well as reduced funding of the Dutch Auction System on the account of huge inflow of foreign portfolio investments.
The Minister of Finance, Dr. Ngozi Okonjo-Iweala, had predicted a $12bn revenue shortfall for the country this year.
A few months ago, however, the CBN dismissed claims that the reserves were experiencing a sharp decline.
The CBN Governor, Mr. Lamido Sanusi, had said in spite of the uncertainties in the global economy, which had made major economies to cut interest rates in order to provide market liquidity, Nigeria’s external reserves would be invested in a currency mix that would optimise returns for the country.
He also allayed fears about the uncertainties in the Nigerian economy and stressed that the reserves could finance about 11 months of importation.
But Okonjo-Iweala stressed the need for the country to shore up the external reserves.
Sanusi had in May said the outlook for the country’s foreign reserves this year was mixed. http://energymixreport.com/foreign-reserves-maintain-decline-drop-to-43-7bn/

Waiting for front page...this is a shocker.