The country’s foreign reserves fell by $544.94 million from $36.17 bn on July 1 to $35.62 billion on August 13, the latest figures from the Central of Nigeria have shown.
The CBN had said that the country’s exchange rate was still being affected by instability in crude oil prices.
It stated that the unstable nature of oil prices would continue to have implications for the country’s macroeconomic aggregates.
The Monetary Policy Committee (MPC) stated that these included domestic revenue, foreign exchange earnings, exchange rate development, price formation, capital inflows, external reserves and balance of payments position.
According to MPC, the impact of continued lockdown of major economies and restrictions on travel and trade will continue to be felt by the Nigerian economy through the short supply of essential imports; rise in inflation through high import prices and exchange rate depreciation and impact o continued uncertainties and volatility of the oil market on macroeconomic stability.
The CBN in its first quarter stated that gross external reserves were $33.69 billion at the end of March 2020.
This indicated a net decrease of 11.6 %, compared with the level in the fourth quarter of 2019.
The external reserves position would cover 4.5 months of import of goods and services or 7.3 months of import of goods only, based on the estimated value of imports for the first quarter of 2020.
The CBN Governor, Mr. Godwin, at the last MPC meeting, reiterated the need for the government to urgently reduce its reliance on oil revenue by gradually diversifying the economy and improving tax collection.
Punch, August 17, 2020
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