Nigeria forex reserves at 7-1/2 month low - central bank

Nigeria's foreign exchange reserves declined 2.34 percent month-on-month to $45.95 billion by Sept. 20, their lowest in seven and half months and a sign efforts to prop up the naira are costing the central bank billions of dollars.

Nigeria CBN Governor, Lamido

   The foreign exchange reserves of Africa's top crude exporter stood at $47 billion a month earlier. The data published on the regulator's website showed reserves were last at this level on Jan. 30, when they were $45.91 billion.
   Nigeria's reserves have come under pressure from attempts by the central bank to support the local currency, which had weakened by around 1.64 percent to last week since June 11, on persistent strong demand from importers and offshore investors exiting the local bond market.
   "Some of the hot money left. In the second quarter we had a better balance of payments than we do now," said economist Bismarck Rewane, CEO of Lagos-based Financial Derivatives.
   The central bank has sold $600 million every week at its twice-weekly auction and additional amounts directly to banks to try to support the local currency at the interbank market.
   "They're between a rock and a hard place. The only way to support the naira is to intervene. They have tried hard to support it, but what is the alternative? Allow it to devalue? That decision is political as well as economic," Rewane said.
   The naira has recovered somewhat since last week, when the US Federal Reserve came out with statements suggesting it was in no rush to scale back its monetary stimulus.