Foreign Reserve Drops By $1.7bn In 4 Months

Withing four months Nigeria external reserve has shrunk by close to $2 billion according to figures obtained from the Central Bank of Nigeria, CBN.

Godwin Emefiele, CBN Governor had during the monthly Monetary Policy Meeting, MPC said the nation’s Forex reserves depleted by over $640 million in May blaming the fall in oil revenue.

The apex bank had in March said the Reserve has decreased by over $1.1 billion as the nation continue to struggle with the fall in income from crude oil sales, which threatens revenue sharing among the 36 states and federating government, including the Federal Capital Territory, FCT.

The NNPC, on Monday,  said crude oil sales has dropped by 98 percent, after the government owned company said last month that it’s remittance into the Consolidated Revenue Account, CRA was no longer guaranteed due to protracted decline in oil sales.

Analysts insist that funding for critical public infrastructure is threatened by decline in oil income, even as the federal government looks for other sources to fund   the deficit in the 2021 Budget.

Emefiele said after the MPC meeting that the country’se reserves lost $640m in May, falling to $34.24bn on May 28 from $34.88bn as of April 28.

The apex bank governor said “This reflects sales to the foreign exchange market and third-party payments.”

In March, the reserves lost $178m after dropping from $34.99bn as of March 1 to $34.82bn as of the end of March 31.

In February, the reserves dropped by $1.1bn, falling from $36.19bn as of February 1 to $35.09bn on February 26.

The CBN, in its January economic report, said, “As a consequence of the lower foreign exchange receipts, the official external reserves declined.

“External reserves stood at $35.44bn at end-January 2021, a decrease of 2.8 per cent and 3.5 per cent from $36.46bn in December 2020 and $36.73bn in January 2020.”