The Central Bank of Nigeria, CBN, Tuesday, announced a new rise of the nation’s foreign reserves by $2.7bn after long-witnessing major decline for several months.
According to figures from the apex bank, the country’s foreign reserves had earlier stood at $33.52bn as of April 30, 2020. Despite the plague of the pandemic, it has witnessed a growth, rising to $36.59bn as of May 29, 2020.
For nearly a calendar year, the figures have been depreciating until this, perhaps, unexpected rise in May 2020. Commenting on the development, CBN Governor Mr Godwin Emefiele confirmed that the country’s reserves had plunged to a record low after hitting a high of $45.17bn on June 11, 2019, losing over $11bn in almost 11 months.
According to the governor, international oil price benchmark, Brent crude, which rose to as high as $70 per barrel in January, slumped to as low as $15.98 per barrel in April. And, since Nigeria’s main export commodity is crude oil, representing around 90 per cent of its exports, the characterised downward trend in its net balance, as witnessed, was expected.
However, in what rather seemed like a shift from the usual, the CBN Governor noted that there was an improvement in crude oil price, standing at about $34.8 per barrel as of May 28, 2020, thereby, leading to a positive growth in the month under review.
While reiterating the need for government to shift its reliance on while, Emefiele further acknowledged the boost from recovery of the oil price on the economy.
He said: “The moderate recovery in crude oil prices would reduce the pressure on the external reserves and government revenue.”
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