Nigeria’s foreign reserves will fall below $34.3 billion by the end of December 2020, according to the Central Bank of Nigeria (CBN).
The projection was disclosed in a report titled ‘Monetary, Credit, Foreign Trade and Exchange Policy Guidelines for Fiscal Years 2020/2021’, which the CBN released on Sunday.
The apex bank said by the end of 2020, Nigeria’s foreign reserve is expected to between $34.3 billion and $29.9 billion.
The projection is based on declining oil prices and the impact of the coronavirus pandemic, according to the report.
Declining export receipts from oil as a result of the pandemic had worsened Nigeria’s current account balance and also led to the depletion of external reserves.
Parts of the CBN report read, “Sequel to the COVID-19 pandemic, the viable ility 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).”
The CBN reported that Nigeria’s foreign reserve grew marginally by $58.464 million in September.
Also, as at August 29, the reserve stood at $35.665 billion and grew to $35.724 billion as of September 29.
The country’s foreign reserves reserves rose from $35.67 billion as at September 1 to $35.81 billion by September 17.
In the same vein, the reserves rose by $65 million from $35.59 billion as at August 20 to $35.66 billion on August 27.
CBN’s latest projection that the country’s foreign reserves will below $34.3 billion by the end of December 2020 means that Nigeria might not match the record it set in 2019 when it opened the year with $43 billion in its external reserves.
Nigeria’s foreign reserves stood at $45 billion at the beginning of 2013.
