By Babajide Komolafe

Central Bank of Nigeria, CBN, has announced that the nation’s external reserve  has fallen by 4.82 per cent to $33.907 billion within the first 21 days of October.

According to data on the website of the apex bank, external reserves fell from $34.589 billion as at September 30 to $33.907 billion, reflecting a decline of $1.682 billion. The fall in reserves is being fuelled by dollar sales at the bi-weekly foreign exchange auction conducted by the CBN.

The apex bank sold $1.97 billion in the first 21 days in October, while demand was $2.16 billion.  In September, the apex bank sold 3.626 billion at the foreign exchange auction in apparent bid to defend the naira following upsurge in demand to $4.392 billion.

It would be recalled that Fitch Ratings lowered its outlook on Nigeria’s BB- rating to “negative” from “stable” on October 22,  due to  concerns about withdrawals from the excess crude account and a drop in foreign currency reserves. The decline in reserves increased the risk to the economy from any renewed drop in oil prices, Fitch said.

Notwithstanding the fall in reserves, the naira however remained relatively stable shedding only eight kobo in the between September 30th and October 21st ,  and eleven kobo as at October 25th.

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