- Foreign Reserves Drop to $35.9bn
The nation’s foreign reserves declined to $35.942 billion from $36.173 billion it was last week.
The reserves rose to $45 billion in June 2019 before declining to $38.535 billion on January 2, 2020.
However, the global health crisis in the wake of the novel coronavirus outbreak that plunged oil prices from around $60 a barrel to $30 per barrel in recent weeks eroded Nigeria’s foreign revenue generation. Weak global demand for the commodity and surged in global uncertainty weighed on oil prices, especially after Saudi Arabia announced it would pump 13 million barrels per day in April once the current OPEC agreement expires this month.
This, coupled with the rising number of coronavirus cases in Nigeria continues to hurt market sentiment and economic outlook. While the apex bank has announced N1.1 trillion to stimulate growth, flight restrictions and declining global demand for crude oil remain a concern as markets doubt the apex bank would be able to sustain its foreign exchange intervention program with a substantial decline in the reserves.
Meanwhile, the Central Bank of Nigeria has devalued the Naira just a week after claiming macro fundamentals do not support devaluation and blamed speculators and hoarders for the recent surged in the foreign exchange rate to N400 per US dollar on the parallel market.
The new CBN official rate is N360 to a US dollar, down from N307/$ while Bureau De Exchange would sell to the people are N380 per US dollar.
