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Chinese Yuan component of Nigeria’s external reserves falls to two-year low

THE Chinese Yuan component of Nigeria’s external reserve fell to $3.2 billion (equivalent) it lowest level in two years. This is according to third quarter external reserve data from the central bank of Nigeria.

Nigeria’s external reserves is made up of several basket of foreign currency holdings including the US dollars, Chinese Yuan, British Pounds, Japanese Yen, Euro and the Swiss Francs.

According to the data seen by Nairametrics, Nigeria recorded an all time high Yuan balance of the equivalent of  $4.298 billion in the second quarter of 2021 when the total gross external reserve was just $35.1 billion. It remained above the $4 billion levels all through the first quarter of 2022 before the drop started.

Nigeria’s external reserve have fallen from the high of $41.5 billion in the third quarter of 2021 but fell to $37.3 billion at the end of the third quarter of the same year. The current external reserve balance is $36.7 billion as of February16 2023.

Nigeria is experiencing foreign currency challenges due to a dwindling oil and gas exports, dearth in foreign investments and forex policies that have stifled repatriation of forex. Apart from the Remnibi or Yuan all foreign currency components also fell.

For example, the US dollar components also fell $30.3 billion to $27.5 billion on year to the third quarter of 2022.

Chinese currency, Renminbi became a part of Nigeria’s foreign exchange reserves in 2011. However, central bank first reported the data in third quarter of 2014 at $2.2 billion.

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Naija Times