The country’s foreign reserves have commenced a downward trend, dropping by $129.83m in one week, the latest data from the Central Bank of Nigeria have shown. The reserves, which stood at $36.57bn as of June 3, fell to $36.45bn on June 11.
According to the CBN, 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 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, the country’s main export commodity, oil, represents around 90 per cent of its exports.
“The country’s oil exports are expected to fall by more than $26bn,” the IMF said. 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.
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 and 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.”