By Mike Abbah
Nigeria’s foreign exchange (FX) reserves  declined  by about $505.68 million (1.37%) in August 2024, representing the biggest dip in four months.
This is according to the latest data on the reserves from the Central Bank of Nigeria (CBN).
The marginal decline in the country’s external reserves coincided with the Nigerian government’s issuance of a $500 million domestic dollar bond, which is expected to provide much-needed support to the external reserves.
The CBN reported a reduction of $505.68 million, bringing the reserves down from $36.827 billion on August 1 to $36.321 billion by August 29, 2024.
Data from the CBN indicate a consistent decline throughout August, with a notable dip in the final week.
The reserves, which stood at $36.827 billion at the beginning of the month, gradually decreased as the weeks progressed.
By August 8th, the reserves had decreased to $36.848 billion, and by mid-month, they had further dropped to $36.529 billion on August 15th.
The decline continued steadily, reaching $36.444 billion by August 22nd and then $36.321 billion by the month’s end.
The dip represents the steepest monthly decline in Nigeria’s forex reserves since April 2024.
This persistent decline comes after a four-month period of about $4 billion growth in the external reserves. It also means that the reserves have lost about 12.64% of its four-month gain in August 2024.
It further highlights the struggle faced by Nigeria’s financial authorities in maintaining reserve levels amidst ongoing economic pressures, including the need to meet import demands and debt obligations, as well as manage liquidity for the naira’s stability.
In the first week of August, the Central Bank of Nigeria (CBN) sold $876.26 million at N1,495/$ to 26 qualified banks in its latest Retail Dutch Auction.
According to a statement from the CBN, a total bid of $1.18 billion was received from 32 dealer banks, while bids from sid banks were disqualified for failing to meet the requirements in terms of deadline and procedure.
Amid the decline in FX reserves, the Nigerian official foreign exchange (FX) market experienced a marked decline in turnover in August, despite the initial Retail Dutch Auction conducted by the CBN.
