Nigeria’s Foreign Reserves Drop $129.83m In A Week
OMOTAYO ARAOYE
Resumption of economic activities and the continued drop of oil revenue arising from the glut occasioned by the Covid-19 pandemic has taken a hit on Nigeria’s foreign, declining by $129.83m in one week, as it recorded $36.57bn on June 3 and fell to $36.45bn on June 11, according to the latest data from the Central Bank of Nigeria.
CBN data shows that the reserves had maintained a steady rise at a level of $33.52bn as of April 30, 2020, before commencing its downward trend in June.
The federal government has started gradual ease of the lockdown measures which is opening up economic activities and pushing up demand for the dollar. Oil revenues into the coffer of the government are also on a dip, shrinking inflow into the treasury.
The reserves had earlier slipped into a decline after hitting a high of $45.17bn on June 11, 2019, losing $11bn to close at $33.89bn as of April 28.
According to the International Monetary Fund, (IMF), the country’s main export commodity, oil, represents around 90 percent of its exports. “The country’s oil exports are expected to fall by more than $26bn,”.
The CBN Governor, Mr. Godwin Emefiele, at the last Monetary Policy Committee meeting, reiterated the need for government to urgently reduce reliance on oil revenue by gradually diversifying the economy and improving tax collection. He said headwinds to growth remained the legacy issues of the persistent infrastructural and security challenges.
Emiefele explained that the headwinds to growth remained the legacy issues of the persistent infrastructural and security challenges
He said, “Central to the committee’s considerations were the impact of the COVID-19 pandemic, the oil price shock and the likely short to medium-term consequences on the Nigerian economy.
“In particular, the committee acknowledged the gradual improvement in macroeconomic variables, particularly the improvement in the equities market, the containment measures of the COVID-19 induced health crisis as well as the impact of the increase in crude oil price on the external reserves.”
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