Nigeria’s currency was losing N1.52k on Monday morning as the foreign exchange market opened the week with an indicative rate of N387.88k per dollar compared to N386.36k/$ it opened on Friday at the Investors and Exporters (I&E) forex window.
The market closed at N387.25k on Friday from N386.38k closed on Thursday last week according to the data from FMDQ.
At the black market, exchange rate was stable as the dollar was trading at N445 the same as Friday.
Nigeria’s gross official reserves declined by US$1.64bn in April to US$33.52bn. A report by FBNQuest showed that this was the eleventh monthly decline in succession. This cumulative fall of US$11.60bn is largely due to the exit of foreign portfolio investors (FPIs).
A recovery of sorts is assured now that the International Monetary Fund (IMF) has disbursed US$3.40bn under its Rapid Financing Instrument (RFI) to tackle the impact of Covid-19. Additional concessional financing is likely from other partners, notably the World Bank and African Development Bank groups. Such inflows go directly into the foreign reserves. The cash from the RFI has already been banked.
Total reserves at end-April covered 6.5 months of merchandise imports on the basis of the balance of payments (BoP) for the 12 months to December, and 4.0 months when imported services are added. These figures should be adjusted, however, for the pipeline of delayed external payments, largely repatriation proceeds due to FPIs and now estimated at close to US$1bn.
