Investors, Diaspora Confidence On Nigeria s Bureaucratic Monetary Policy Drop As Foreign Reserves Drop naija247news.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from naija247news.com Daily Mail and Mail on Sunday newspapers.
Nigeriaâs foreign reserves record the biggest drop in May 2021 to $34.2 billion. Investment banking analysts said Naira remains overvalued despite the unification of the Central Bankâs (CBN) official and autonomous foreign exchange (NAFEX) rates.
The Nigerian local currency has been struggling to retain value amidst scarce foreign currency inflows into the domestic economy. In a new report, investment banking experts at Chapel Hill Denham Limited said they see room for rates adjustment though not certain about timing.
The investment stated that despite the improved liquidity at the Investors and Exporters window, naira for dollar rate closed flat across the varying segments last week. Specifically, analysts said rates at the Investors and Exporters window and the central bankâs secondary market intervention sales window closed flat at N412 and N380.7 respectively, noted also spike in arbitrage activities in the FX market.
Foreign debt accounts for more than 95% of Nigeriaâs external reserves after falling behind $35 billion mark due to lack of external inflows arising from weak foreign investors sentiment analysts said in a report.
While foreign debts level has increased further as a result of pandemic-induced fiscal stress, the Nigerian external reserve has plunged strongly to $34.7 billion as of May 2021 compared with $33.348 billion external debts.
Tumbling gross foreign reserve has however weakened the Nigerian central bank market intervention amidst scarcity of foreign currencies inflow into the economy.
Analysts told MarketForces Africa that CBNâs weekly intervention in the foreign exchange market has dropped, even after the economic lockdown has been lifted.