Mounting forex demand shrinks Nigeria’s reserves to below $24 billion

• Crude oil production rises to 1.8m bpd

Even with relative stability in oil production and price in the international market, the nation’s foreign reserves have been shrinking.

The stock of the national reserves lost about $270 million in the last one week from $24.23 billion to a new low of $23.95 billion. It has also lost about $920 million in the last one month from $24.87 billion. This, market watchers blame on an unrelenting huge appetite for dollars by importers and others.

The Director-General of the West African Institute for Financial and Economic Management, Prof. Akpan Ekpo, said the cause of the depletion amid relative stable price and production is still the case of demand and supply.

The demand for foreign exchange is still bigger than the supply and within these periods, prices and production have been hovering as well.

“You cannot plan with uncertainty. What the government can do at best now is to ration. It cannot also stop entirely from spending the ones that came in. It is a matter of the quantity that came in and the quantity the people are asking for. If you spend and do not replenish more than you spent, the reserves will definitely lose level,” he said.

Reiterating that government should now step up negotiations with the militants to ensure stability of productions to take advantage of any favourable price, he also urged government to look the direction of cheap international funds.

Meanwhile, the Department of Petroleum Resources (DPR) as at yesterday put the country’s current crude oil and condensate production at between 1.8 million barrels per day.

This is, however, a leap from the 1.77m bpd the country produced in June this year.

Total export proceeds of $212.25 million were recorded in July 2016 as receipt against $219.26 million in June 2016.