Connect with us

Business

Nigeria’s reserves may drop below $34bn in December, CBN warns

Published

on

images 31 Nigeria’s reserves may drop below $34bn in December, CBN warns

Nigeria’s foreign reserves will drop below $34.3 billion by the end of December , the Central Bank of Nigeria (CBN) has predicted.

The apex bank stated this in its report:‘Monetary, Credit, Foreign Trade and Exchange Policy Guidelines for Fiscal Years 2020/2021, released on Sunday. It said by the end of 2020, Nigeria’s foreign reserve is expected to lie between $29.9 billion and $34.3 billion.

It explained the prediction is based on declining oil prices and the impact of the coronavirus pandemic.

“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,” the report read.

“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).”

According to the report, Nigeria’s foreign reserve grew marginally by $58.464 million in September.

As of August 29, the reserves stood at $35.665 billion and grew to $35.724 billion as of September 29.

The reserves had continued its upward movement, rising from $35.67 billion as of September 1 to $35.81 billion on September 17.

Prior to September, the reserves rose by $65 million from $35.59 billion as of August 20 to $35.66 billion as of August 27.

This prediction means that Nigeria may not set a new high record as it did in 2019 when it opened the year at $43,075,740,908 to break a six-year record.

The last time Nigeria’s reserves opened above $42 billion was in 2013 when it opened the new year at above $45 billion.

Last month, the CBN Governor, Godwin Emefiele, while addressing bankers at the 13th annual Banking and Finance Conference organised by the Chartered Institute of Bankers of Nigeria (CIBN), said the external reserves stood at $36 billion.

Giving reasons, he said: “Restrictions on global travel by land and air, along with the slowdown in commercial activities, led to a significant reduction in the demand for crude oil. These factors contributed to the 65 per cent decline in crude oil prices between January and May 2020. This decline in prices, along with OPEC reduction of our production quota, led to a significant decline in our foreign exchange earnings, along with a more than 60 per cent decline in revenues due to the federation account. Today, crude oil prices have recovered from its low of $19 in April 2020, but it is yet to return to pre-pandemic levels of over $60 in January 2020. With the decline in our foreign exchange earnings and subsequent adjustments in the value of the Naira vis-à-vis the US dollar, the CBN has continued to implement a demand management framework, which is designed to support improved production of items that can be produced in Nigeria, and further conservation of our external reserves. These measures have helped to prevent a significant decline in our reserves.

Our external reserves currently stand at $36 billion and are sufficient to cover eight months of import of goods and services.

Continue Reading
Comments

Business

COVID-19: Sterling Bank pledges N10bn to revamp domestic tourism

Published

on

download 4 COVID-19: Sterling Bank pledges N10bn to revamp domestic tourism

Sterling Bank Plc, has pledged a N10 billion facility for the purpose of revamping domestic tourism in the country post COVID-19.

Chief Executive Officer (CEO) of the Bank, Mr. Abubakar Suleiman, made the commitment while addressing participants at a tourism webinar organised by the Nigerian Tourism Development Corporation (NTDC) with the theme: Nigerian Domestic Tourism: Re-Imagined.

Suleiman who spoke on the topic: “Investment for the Tourism Sector to Enhance Domestic Tourism,” noted that, “Sterling Bank has funding capacity and is ready to inject N10 billion into domestic tourism” if the right stakeholders are available in the industry.

He enjoined stakeholders in the industry to collaborate rather than compete, saying stakeholders need to come together to offer worthwhile experience in different aspects of the industry.

Suleiman encouraged operators in the domestic tourism industry to sit down with their bankers to build the experience together, adding that the sector is a billion dollar business. He stressed the need to have extensive discussion with stakeholders in the tourism sector in order to scale up. He advised the stakeholders to stop approaching the government as individuals but as a team so they can push for policy initiatives that would be beneficial to the industry.

Minister of Information and Culture, Alhaji Lai Mohammed, who declared the virtual meeting open, noted that tourism assets and other social imprints in the country are huge just as tourism remains the largest employer of labour.

The Minister who was represented by the Permanent Secretary, Mrs. Isu Gekpe, said the restriction of the tourism sector in the wake of the COVID-19 pandemic has affected the most vulnerable groups in the industry.

She observed that the promotion of tourism is the first step to re-starting the economy post COVID-19 and encouraged stakeholders to promote existing tourism assets in the country while a robust legal framework is being worked out.

Also speaking, Director-General of NTDC, Mr. Folorunsho Coker, expressed the hope that the commission would be able to exploit opportunities in the hospitality industry through packages, affordability of flight and access to tourism destinations. Coker said there was a need to have a solid foundation for domestic tourism which international tourism could lean on in the future.

Continue Reading

Business

Naira slides to 460/$ at parallel market

Published

on

images 48 3 Naira slides to 460/$ at parallel market

The naira fell slightly at the parallel market on Monday , as it exchanged to the dollar for N 460 / $ as of the close of work .
The naira had exchanged to the dollar on Friday for 458 / $ .
This is as the country ’s external reserves continued to maintain its downward trend.
Figures obtained from the Central Bank of Nigeria revealed that the country ’ s external reserves which stood at $35 . 75 bn as of October 02 had lost $ 78 . 34 m to close at $ 35 . 67 bn as of October 16 .
The CBN had stated in its report on ‘ Monetary, credit , foreign trade and exchange policy guidelines for fiscal years 2020 / 2021 ’ that external reserves were expected to lie between $ 29 . 9 bn and $ 34 .3 bn by 2020 ending .
It said, “ 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 bn and $ 34 .3 bn at end -December 2020 ( predicated on current declining oil price between $ 20 and $ 40 ) . ”

Continue Reading

Business

External reserves drop to $35.67bn

Published

on

images 42 3 External reserves drop to $35.67bn

Nigeria’s external reserves, last week, fell for the fourth consecutive week to $35.67 billion even as the naira depreciated to N462 per dollar in the parallel market.

Data from the Central Bank of Nigeria (CBN) show that the reserves fell to $$35.672 billion on Thursday last week from $35.725 billion the previous week. This translated to week-on-week (w/w) decline of $53 million dollars, more than 100 percent increase from the $23 million w/w decline recorded in the previous week.

According to the CBN data, the reserves have been on the downward trend for four weeks since September 17th. It fell by $139 million to $35.672 billion last week Thursday from $35.811 billion.

Prior to the four weeks decline, the reserves rose steadily for two weeks, by $145 million to $35.811 billion on September 17th from $35.666 billion on September 2nd.

Investigations reveal that the sustained decline, especially at a time of relatively stable crude oil prices, might not be unconnected to the CBN’s dollar injection in the foreign exchange market in a bid to keep the exchange rate stable.

However, in spite of the intervention, the naira depreciated by N5 in the parallel market last week, though it remained stable at the Investors and Exporters (I&E) window.

Continue Reading

Trending