By Fola James
The Central Bank of Nigeria, CBN has disclosed that the nation’s current $35 billion foreign reserve is not sustainable and bound to fall below the current $35 billion by the end of the year.
The Godwin Emefiele-led bank made this known on Sunday, in its report titled ‘Monetary, Credit, Foreign Trade and Exchange Policy Guidelines for Fiscal Years 2020/2021’.
The apex bank blamed the depleting Reserve on the corona virus pandemic, but analysts in the sectors insist that, the nation’s savings is bound to plunge further as import responds to end of the year swings.
CBN said in the report that “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.
“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 downward slope of the reserves which stood at $35.66 billion by end of August, has been a source of worry to many Nigerians who fear its negative impacts on the Naira, the national currency.
The reserve has experienced headwinds following the outbreak of COVID 19 in January this year, which has grossly impacted earnings from crude oil, the nation’s major economic export.
