The pressure on the foreign exchange reserves has persisted leading to $22.01 million decline to $36.13 billion week to date, as forex outflows outpaced inflows.
Foreign exchange reserves are assets held on reserve by a monetary authority in foreign currencies, according to the Central Bank of Nigeria (CBN).
In the month of June, external reserves maintained a stable trend as crude oil price stabilised. Reserves stood at US$36.19 billion as at June 30, 2020 with a year-to-date decline of -6.24 percent, FSDH Research stated in its macroeconomic review report.
These reserves are used to back liabilities and influence monetary policy. They include foreign banknotes, deposits, bonds, treasury bills and other foreign government securities. These assets serve many purposes but are most significantly held to ensure that a government or its agency has backup funds if their national currency rapidly devalues. Foreign exchange reserves are also called international or external reserves.
Naira appreciated by 0.26 percent as the dollar was quoted at N386.00 on Monday compared to N387.00 on the previous day at the Investors and Exporters (I&E) forex window.
Most participants maintained bids between N375.00 and N390.00 per dollar, analysts at FSDH research said.
The foreign exchange market opened on Tuesday with Naira weakening by N2.00k as the dollar was trading at N467 as against N465 traded since Thursday last week.
The market opened with an indicative rate of N387.92k on Tuesday, signaling a depreciation of N0.46k when compared with N387.46k opened with on Monday, data from FMDQ showed.
At the I&E window, the foreign exchange daily turnover increased by 44.14 percent to $36.28 million on Monday from $25.17 million recorded on Friday last week.
