By Babajide Komolafe

The nation’s external reserves fell by $1.12 billion in six weeks to $40.71 billion last week. 

Data by the Central Bank of Nigeria, CBN, showed that the external reserves fell to $40.71 billion on Wednesday last week, December 15th, from Friday October 29th. 

According to the apex bank the external reserves fell by $613 million in November and further by $509 million in the first half of December.

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Prior to the six weeks decline, the external reserves enjoyed an eight weeks upward trend, gaining $5.05 billion between September 30th and October 29th, courtesy of the N4 billion inflow from the Eurobond offer and rising crude  oil prices. 

The six weeks downward trend since October 29th according to analysts is due to the CBN’s efforts at defending the naira. 

Projecting further decline in the reserves,  analysts at Financial Derivatives Company Limited, said: “The gross external reserves is expected to maintain its downward trend as the CBN intensifies efforts at defending the naira.”

Meanwhile the naira last week appreciated marginally  by 0.01% at the Investors and Exporters, I&E,  forex window to close at N415.07 per dollar from N415.10  per dollar the previous week. 

This trend according to analysts at Cowry Assets Management Limited will persist this week. “In the new week, we expect the Naira to strengthen slightly against the dollar as the threat of the new COVID-19 variant (Omicron) softens,” they said.