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Foreign reserves shed $50.83m in 10 days

Capital importation into Nigeria drops by $790m, largest decline in over 2 years

Nigeria’s foreign reserves fell by $50.83 million from $35.75 billion to $35.69 billion in the ten-day period between 2nd and 12th October 2020, data from the Central Bank of Nigeria (CBN) showed on Thursday.

The reserves, which has seen rising and falling moments in the past couple of weeks, had a balance of $35.67 billion as of 1st September and climbed to $35.81 billion on 17th September.

They grew by $65 million from $35.59 billion as of 20th August to $35.66 billion on 27th August.

Earlier, they had depleted by as much as $278.91 million from $35.87 billion on 29th July to $35.59 billion on 19th August.

“Nigeria’s international reserves decreased marginally from $36.43bn at end-April to $36.19bn at end-May 2020.

“The net decrease in reserves was due to the sales of foreign exchange at the Secondary Market Intervention Sales and Investor and Exporter windows as well as payments to external creditors.

Read also: Foreign reserves grew only marginally in September –CBN data

“Thus, the level of import cover for goods and services, decreased from 4.0 months in April to 3.9 months in May 2020, but remained above the IMF threshold of 3.0 months.

“A comparative analysis of reserves per capita in May 2020 showed that Nigeria’s reserves per capita was $176.58, compared to $889.73 for South Africa, $491.10 for Angola, $218.94 for Egypt and $24.10 for Ghana,” the CBN said in its May 2020 monthly economic report.

The apex bank forecasted that the country’s external reserves would hover anywhere between $29.9 billion and $34.3 billion by the end of this year.

“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,” the CBN said.

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