The Central Bank of Nigeria (CBN) has projected a major plunge in the country’s foreign reserve by the end of 2020, despite the increase it recorded last week, as outflows are expected to outweigh inflows.
According to the Apex bank, Nigeria’s foreign reserve could fall to $29.9 billion by the end of the year due to the decline in oil prices and the impact of the Coronavirus (COVID-19) pandemic. This is contained in a ‘Monetary, Credit, Foreign Trade and Exchange Policy Guidelines for Fiscal Years 2020/2021’ released by the Central Bank of Nigeria.
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The apex bank stated: “Sequel to the COVID-19 pandemic, the viability of the external sector in 2020 is expected to deteriorate, given the present worsening current account balance and depletion of external reserves driven, largely, by decelerating export receipts, particularly oil.”
“Specifically, the degree of external reserves accumulation is expected to decelerate, as outflows are expected to outweigh inflows.
“As a result, external reserves are expected to lie between $29.9 billion and $34.3 billion at end-December 2020 (predicated on current declining oil price between $20 and $40).”
Nigeria’s foreign reserve stands at $35.72 billion. Brent crude at the time of this report is $41.48 per barrel while Nigeria Bonny Light is $40.39 per barrel.
By; Ifunanya Ikueze