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Nigeria's Foreign Reserve Appreciates By $2.7b – CBN

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The Central Bank of Nigeria has revealed yesterday that the nation’s foreign reserve has gained up to $2.7bn in May after declining for several months. According to the CBN, the foreign reserve which stood at $33.52bn as of April 30th, 2020 has subsequently risen to 36.59bn as of May 29th, 2020 making it an increase by 2.7%. The reserve has rocked the bottom after hitting a high of $45.17 on June 11, 2019, making it a loss of more than $11bn in 11 months.

The international oil price benchmark, Brent Crude, which rose to as high as $70 per barrel in January, slump to as low as $15.98 per barrel in April. According to the International Monetary Fund (IMF), Nigeria main export commodity is crude oil, which represents around 90% of its exports.

In May, the IMF said ‘The country’s oil exports are expected to fall by more than $26bn,”. 

During the last monetary policy Committee meeting, the CBN Governor, Godwin Emifele revealed there was an improvement in the crude oil price which stood at about $34 per barrel as of May 28th, 2020. Emifele added, “The moderate recovery in crude oil prices would reduce the pressure on the external reserve and government overall revenue.

The CBN Governor enjoined the need by the government over its over-reliance on the oil revenue through diversifying the economy and improving tax collection. He disclosed the infrastructural deficit and the security have continued to be a bend to the Nigerian growth.

He added, “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 nation’s economy.

He continued “Especially, the committee acknowledged the gradual improvement in macroeconomic variables particularly the improvement in the equities market, 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”

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