The nation’s external reserves have dropped to $44.35, according to the latest figure from the Central Bank of Nigeria.

The development makes the external reserves a few millions of dollars closer to a 12-month low of $44.2bn.

 A research has said that the amount the CBN is offering for sale on its Retail Dutch Auction System is fast depleting the external reserves.

Nigeria’s external reserves had been depleted by $2bn from $46.77bn on September 6 to $44.66bn on November 25, 2013. The external reserves fell to a nine-month low at $45.08bn on October 14.

The reserves fell to the $45bn mark on September 20, and had hovered around $45bn until November 8 when it dropped to the $44bn mark.

According to financial analysts, the CBN’s stance to keep defending the value of the naira from the reserves may further deplete the amount in the reserves.

The Federal Government had targeted $50bn reserves by the end of 2012. But the reserves closed the year at $44.26bn on December 24, 2012, finishing $6bn below the government’s target.

Going by the rate of depletion, the external reserves may record below the $44.26bn at the end of 2012, according to analysts.

However, the CBN recently dismissed claims that the reserves were experiencing a sharp decline.

The CBN Governor, Mr. Lamido Sanusi, said in spite of the uncertainties in the global economy, which had made major economies to cut interest rates in order to provide market liquidity, Nigeria’s external reserves would be invested in a currency mix that would optimise returns for the country.

He also allayed fears about the uncertainties in the Nigerian economy and stressed that the reserves could finance about 11 months of importation.

The central bank boss, however, said since the financial crisis of 2008, reserves managers had come under increased pressure to find ways of enhancing income.

Source: Punch (by Oyetunji Abioye)