Nigeria’s external reserves drops to $38.84bn, lowest in eight months


Uba Group

Uba Group


Nigeria’s foreign exchange reserve sustained its descent for the third consecutive week, as it fell to its lowest level since October 8, 2021 to close the trading week ended May 18, 2021.

Specifically, the reserves declined by $175.17 million week- on- week (w/w) to $38.84 billion. Across the FX windows, the naira was flat at N419.03/$ at the Investors’ and Exchange (I&E) window (IEW) but depreciated by 1.2 percent to N606.00/$ at the parallel market.

At the I&E window, total turnover (as of 19 May 2022) decreased by 39.1 percent week-to-date (WTD) to $453.49 million, with trades consummated within the N410.00 – N453.35/$ band.

In the Forwards market, the rate weakened at the 1-month (-0.1% to N418.63/$), 3-months (-0.2% to N424.79/$), and 1-year (-1.1% to N456.94/$) contracts but was flat at the 6-Month (N434.54/$) contact.

Earlier in the week, precisely Tuesday, May 17, exchange rate between the naira and the US dollar closed at N418.5/$1 at the official Investors and Exporters (I&E) window, appreciating by 0.71% from N421.5/$1 recorded the previous day.

Naira gained against the US dollar on Tuesday, following the record-high depreciation recorded in the previous trading session. Likewise, FX turnover improved by 48.7 percent to $105.1 million in contrast to $70.68 million that exchanged hands on Monday.

On the flip side, the exchange rate against the US dollar depreciated by 0.5 percent on Wednesday morning at the peer-to-peer market, trading at a minimum of N603/$1 compared to N600/$1 recorded as of the same time the previous day.

Meanwhile, the exchange rate at the parallel market remained stable at N590 to a dollar. This is according to information obtained from BDCs operating in Nigeria.

Nigeria’s external reserve however fell below the $39 billion threshold on Monday as the level recorded a 0.24% decline to stand at $38.92 billion from $39.01 billion recorded as of the previous day.

The last time Nigeria’s external reserve level was below $39 billion was seven months ago, October 8, 2021 specifically.

“The decline in the external reserve level can be attributed to the continuous intervention by the Central Bank in the FX market in order to ensure the stability of the local currency

The decline in the external reserve level can be attributed to the continuous intervention by the Central Bank in the FX market in order to ensure the stability of the local currency.

Trading at the official NAFEX window showed that Naira gained 71 basis points against the US dollar on Tuesday, to close at N418.5 to a dollar.

The opening indicative rate closed at N417.42/$1 Tuesday, May 17 2022, 12 kobo depreciation compared to N417.3/$1 recorded on Monday, May 16, 2022.

Furthermore, an exchange rate of N444/$1 was the highest rate recorded during intra-day trading before it settled at N418.5/$1, while it sold for as low as N410/$1 during intra-day trading.

A total of $105.11 million in FX value exchanged hands at the official Investors and Exporters window on Tuesday.

According to the data from the FMDQ, forex turnover improved by 48.71 percent from $70.68 million recorded on Monday to $105.11 million on Tuesday May 17, 2022.


The Central Bank of Nigeria, it would be recalled, disclosed that foreign education and health tourism are two major means foreign exchange is lost in Nigeria.

Godwin Emefiele, Governor of the CBN said $40billion was spent on education and health in the last 10 years (2010-2020).

According to the CBN’s publicly available Balance of Payments Statistics, foreign education alone gulped a whopping sum of $28.65 billion between 2010 and 2020.

Also, the Nigerian Sovereign Investment Authority disclosed that Nigerians spend over $1 billion annually on medical treatment abroad.

This fact is corroborated by a review of the Central Bank’s balance of payment data, which indicate that Nigerians have spent $11.01 billion on healthcare related services over the past 10 years.

“In the 1980s and 1990s, you would search hard before you could find parents who sent their children to primary and secondary schools abroad. Today, a sizable amount of the foreign exchange requests Nigerian banks receive for school fees are for primary and secondary school education, some of which are for neighbouring African countries,” the apex Bank lamented.

Emefiele had said: “If this amount were not sent abroad but was part of the CBN’s Foreign Exchange Reserves, the Naira would be much stronger today.”