Forex scarcity due to falling crude oil prices forced the Central Bank of Nigeria to access the country’s foreign reserves to make forex available in the economy. The country’s foreign reserves which stood at $38.07bn at the end of 2019 fell to $34.9bn at the end of the first quarter of 2020.
The Central Bank of Nigeria sold forex from the country’s foreign reserves to achieve stability of the exchange rate and provide liquidity despite the low revenue from oil sales. The Central Bank Governor, Godwin Emefiele during the last Monetary Policy Meeting, said External reserves position stood at $34.9bn in March 2020 as against $38.07bn in December 2019. He said the depletion in external reserves was driven by FX sales to Bureau De Changes and Import & Export window as well as dwindling oil receipt. The CBN had technically devalued the naira after all interventions in the market such as imposing sanctions on errant operators and the use of moral suasion to curb illegal forex operations that did not sustain the exchange rate.