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Nigeria’s foreign reserves shed $454m in 6 weeks

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ECONOMY: The road ahead is rough, really rough, Emefiele tells Senate

Nigeria’s foreign reserves depleted by $454 million from $36.572 billion to $36.118 billion in the 45-day period between 1st June and 15th July, latest data from Central Bank of Nigeria’s website showed on Thursday.

The country’s external reserves have been buckling under pressure since the year began, taking a double whammy of dwindling oil receipts from the recent oil crash and disruption of trade and investment caused by the coronavirus pandemic, which led to sharp fall of $9 billion year to 22nd June.

The apex bank stated in its latest monthly report, that of February 2020, the reserves dipped by 0.4 per cent from $36.73 billion in January to $36.6 billion in February, citing forex market intervention and direct payment pressures.

Read also: Nigeria’s foreign reserves fall by $373m in June –CBN

It said the foreign reserves balance could fund goods and services imports for four months or 6.4 months of only goods, based on the fourth quarter of 2019 import data.

The proportion of the country’s external reserves as of February was $330 million (0.9 per cent) for federation reserves, $6.6 billion (18.1 per cent) for the Nigerian government and $29.6 billion (81 per cent).

Godwin Emefiele, the central bank chief, stressed at the regulator’s last Monetary Policy Committee (MPC) meeting the imperative of scaling down reliance on oil revenue through increasing economic diversification and expansion of tax collection efforts.

“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,” he said.

Another meeting of the MPC is due next week.

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