Financial experts in Nigeria are predicting a further drop in the country’s external reserves to US$44 billion in the months ahead, from the US$45 billion recorded two weeks ago.
The private Punch newspaper Friday quoted the official website of the Central Bank of Nigeria (CBN) as saying the reserves hit US$45 billion after hovering between US$46 billion and US$48 billion for several months.
According to the website, the latest data – as at 8 Oct. – showed that the reserves stood at US$45.1 billion.
Financial analysts said the apex bank’s policy of defending the value of the local currency, the naira, from falling further will force it to continually dip its hands in the reserves to sustain the move.
Mr. Izu Jacobs, a financial analyst with a private investment firm, predicted that the reserves would drop to US$44 billion mark before the end of October, arguing that the rate at which the reserves were being depleted lately indicated it would continue to drop further.
Another analyst, Mr. Sola Ekundayo, said the reserves have been dropping because the apex bank had been using it to shore up the local currency.
“I believe part of the reserves may still be used to defend the naira in the coming days, hence external reserves may record US$44bn any moment from now,” he said.