Nigeria’s Apex Bank (CBN) has allegedly spent $4.7 billion to protect the interest of the naira this year, even as the nation’s external reserve fell to $29.6 billion week.
According to information published by the CBN on its website, the external reserve fell by $189 million from $29.778 billion on April 2nd to $29.589 billion on April 9th. Consequently the reserve has fallen by $4.879 billion since December 31st 2014.
Speaking on developments in the nation’s foreign exchange market in the first quarter of the year, Managing Director/Chief Executive, Financial Derivative Company Limited, Mr. Bismarck Rewane said that the apex bank has so far spend $4.7 billion to defend the naira this year, adding that the nation’s external reserve import and payments cover has fallen to 4.8 months, 1.2 months below the international standard for healthy external reserve.
The Managing Director also stated that the 13 per cent appreciation of the naira in the parallel market in the last two weeks to N197 per dollar from N225 was due to election sentiment and elimination of fear premium. He predicted that the appreciation would soon be reverse and the naira would depreciate further because the fundamentals remain unchanged. “At the parallel market, the naira will trade at N215-N220 against the dollar again”, he said.
Rewane advised the incoming government of the General Mohammudu Buhari to allow the naira find its true value, calling for reduction in interest rate and easing of monetary policy stance.