CBN lists reasons for naira’s struggle against Dollar as FX earnings from crude dwindles


The Governor of the Central Bank of Nigeria, Godwin Emefiele, has blamed the growing request for foreign school fees and travelling by Nigerians as one of the causes of the Naira struggle.

Emefiele, who stated this at the 57th annual bankers’ dinner organized by the Chartered Institute of bankers of Nigeria (CIBN) in Lagos over the weekend, said Naira was struggling due to the increasing forex demand in the country and lack of foreign exchange receipt from crude oil sales into Nigeria’s reserves.

He noted that oil reserves have dried up steadily from $3.0 billion monthly in 2014 to an absolute zero dollar today.

Meanwhile, the CBN says the country’s external reserves no longer come from selling crude oil.

Emefiele said due to the struggle in naira as well as the increase in the demand for forex, there has been a huge decline in foreign reserves.

He said Nigeria’s foreign reserves receipts declined from US$3.0 billion monthly to zero in 2022.

The CBN governor, however, expressed optimism that the short-term outlook of the Nigerian economy remained sound, adding that diversity was important.

“The official foreign exchange receipt from crude oil sales into our official reserves has dried up steadily from above $3.0 billion monthly in 2014 to an absolute zero dollars today,” he said.

“The bulk of the money in Nigeria’s foreign reserves comes from the export of gas and oil to other nations. But increasing instances of crude oil theft have hurt Nigeria’s ability to export enough crude oil. Consequently, its foreign exchange reserves are falling,” he added.

“Nigeria’s external reserves fell to $37.17 billion as of November 15, 2022, data from the CBN confirms. This is the lowest level of the external reserves this year and the lowest level since September 30, 2021, when the country faced a barrage of currency depreciation.”

Speaking further on the naira redesign policy, Emefiele said the apex bank’s move to redesign the three different denominations of Nigerian banknotes had a good reason.

He also said inflation rate will remain elevated and above the 12.5 percent growth-aiding threshold.

Nigerian currency, the naira, last week recovered some of its lost value at both the official and black market.

According to FMDQ securities data, the Naira ended trading at N445 at the investor’s and exporters’ official window market.

The week’s closing rate represents 0.22 per cent or N1 recovery when compared to the N446 to a dollar it earlier recorded.

The improvement of Nigerian currency is coming on the back of improved dollar supply at the market as participants in the I&E window transacted $145.89 million on Thursday.

Also, in the parallel market, the local currency appreciated against the dollar to close at N745 to a dollar.

It was the same strong performance for Naira against British pounds sterling, albeit very little.

The Central bank of Nigeria‘s interbank window data shows that the Naira on Thursday exchanged against the Pound Sterling at N526.96/£1 versus N526.97/£1 the previous day.

While against the Euro, it was unchanged at N455.56/€1 same rate as Wednesday.

The National Bureau of Statistics (NBS) has revealed that the agricultural sector continues to struggle despite the massive intervention in the sector.

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