ABUJA (Sundiata Post) – Data from the Central Bank of Nigeria (CBN) show that gross official reserves declined by $700m in May on a 30-day moving average basis to $26.4bn. The average has been an outflow of US$470m in the ten months since the one-off bonus of July 2015 when the apex bank acquired the forex deposits of $2.5bn of government departments and agencies.
The authorities have limited weekly forex sales at the CBN’s rate of N197 per US dollar to about $200m yet are still struggling to contain the depletion in the face of strong, but easing import demand. Reserves at end-May provided merchandise import cover of 6.1 months (and 4.4 months when services are included).
The CBN estimated in January 2016 that its monthly supply of forex for sale had slumped to $1bn. The spot price of Bonny Light has since recovered by 75% to around $50 per barrel while output has fallen by at least 500,000 barrels per day.
The CBN circular of June 2015 ruled that 41 import items were no longer eligible for fx at its rate. Last month, the NNPC set a new retail price ceiling for petrol of N145/litre and indicated that the marketers would not be able to buy fx at the CBN’s selling rate.
The success of the second window which is been awaited remain critical in unlocking additional forex supplies with the CBN expected to err on the side of conservatism.