The CBN revealed in its data on movement of foreign reserves
that the external reserves which ended December 30, 2022 at $37.08bn fell to
$37.01bn at the end of January 30, 2023.
Nigeria’s external reserves fell by $3.43bn in 2022 after
dropping from $40.52bn as of the end of December 31, 2021.
Cordros Securities stated in its January report on ‘MPC to
favour smaller rate hikes in the short term’ noted that local currency weakness
remained intact.
It stated that, “Foreign investors remain on the sidelines
given the lack of FX reforms, higher global interest rates and weak
macroeconomic narrative.
“In addition, CBN’s FX supply to the different FX market
segments remains significantly below pre-pandemic levels. Meanwhile, the demand
for the greenback remains high as market players continue to source for FX to
fulfil and clear their outstanding obligations. Consequently, since the last
policy meeting, the local currency depreciated by 3.4 per cent to N461.25/$ at
the official market as of 18 January 2023.
“However, given that the FX reserves remain within the CBN’s
comfort level, we expect the Committee to highlight the need for the apex bank
to maintain its periodic FX interventions and intensify its call to the fiscal
authorities to amplify their efforts in ensuring higher crude oil production
over the short-to-medium term.