Nigeria’s external reserves have continued to plummet in the last three weeks, dropping by $837m to $36.931bn on June 25, from $37.768bn it stood at June 6, 2012.

Latest figures released by the Central Bank of Nigeria showed that the reserves fell by $837m in 19 days.

Forex reserves had risen to their highest in 21 months to $37.02bn by May 14, from $36.66bn at the end of April.

However, the reserves have continued to decline, following continued drop in oil price. Some analysts have also said that the CBN has been leaning on forex reserves to support the local currency.

The CBN, in a bid to reduce the pressure in the foreign exchange market, recently increased its dollar sales to $400m at the bi-weekly auction of the apex bank, from $300m.

Reliable sources at the Wholesale Dutch Auction System had told our correspondent that there were signs that the apex bank had had to rely more on the forex reserves to defend the naira.

A currency dealer, who preferred not to have his name mentioned, said, “In the absence of any external dollar inflow, the CBN will have to lean on the external reserves to defend the naira. We have seen signs of this recently, as the apex bank had increased its dollar supply at the WDAS to support the naira.”

Meanwhile, the CBN has announced that it would hold a meeting with forex dealers and representatives of Deposit Money Banks towards reflecting on current issues in the forex market in Lagos on Thursday.

A circular released by the CBN on Sunday stated that the meeting would address recent developments in the market.

The circular reads in part, “This is to inform all authorised dealers, destination inspection and pre-shipment inspection schemes service providers that the foreign exchange officers meeting has been scheduled to hold in Lagos

“The meeting shall afford participants the opportunity to deliberate on the recent developments in the forex market. Please, note that representation of banks at the meeting should be by officers who are conversant with international trade and treasury operations.”

Source: Punch/Ademola Alawiye