The latest data from the Central Bank of Nigeria (CBN) showed that foreign currency reserves halted two months of increases in August, falling by 0.50 percent (or US$194.34m) to US$39.02bn.
The fall in Nigeria’s foreign exchange reserves came despite the oil price remaining above the benchmark set by the Federal Government in the 2022 budget, highlighting how Nigeria is failing to capitalise on still higher-than-expected oil prices. For context, crude oil averaged around US$98 per barrel in August, which compares with the Federal Government’s benchmark of US$62 per barrel. The August drop adds to the broader declining trend, with Nigeria’s foreign currency reserves falling in five out of the past eight months amid dwindling oil production due to theft and vandalism and continued CBN intervention to prop up the naira.
