Nigeria’s lowest FX reserves in OPEC show CBN’s naira challenge

Nigeria has one of the lowest foreign-exchange reserves, among the 12-member Organisation of Petroleum Exporting Countries (OPEC), highlighting the challenge before the Central Bank (CBN), as it struggles to defend the naira amid falling oil prices.

FX reserves in Africa’s largest economy are low both in absolute terms and as a percentage of Gross Domestic Product (GDP).

Nigeria’s $36.5 billion in gross FX reserves is only equivalent to 7 percent of its 2013 economic output of $520 billion.

This compares with

Foreign reserves fall to six-month low of $36.7 bn

Nigeria’s foreign reserves fell to a six-month low of $36.7 billion by December 1, down 4.5 percent from the previous month as the central bank stepped up its defence of the naira currency, figures on the bank’s website showed.

The reserves of Africa’s biggest economy and top oil producer stood at the same level as in June this year and were down from $38.45 billion on Nov. 2, the data showed on Wednesday.

The naira has

New BDC guidelines to conserve Foreign Reserves — CBN

THE Central Bank of Nigeria (CBN) has reiterated that the Bank’s modifications to the guidelines on the regulation of Bureaux de Change (BDCs) in Nigeria are aimed at conserving the country’s foreign reserves, among other objectives.

This position was made known by the CBN Governor, Mr. Godwin Emefiele, on Wednesday, July 16, 2014, during an interactive session with the House of Representatives Committee on Banking and Currency.

Addressing members of the Committee, Mr. Emefiele explained that modifications had to be made to the guidelines following observations that the current operations of BDCs in Nigeria had deviated from the objectives for which they were lisensed in the first place.

According to the CBN Governor,