Nigeria’s foreign reserves rise by $70m in one week

Nigeria’s foreign reserves rise by $70m in one week.

Nigeria's foreign reserves rise by $70m in one week

The latest figures from the Central Bank of Nigeria have shown that, the country’s foreign reserves rose by $70m from $35.59bn as of August 20 to $35.66bn on August 27.

Earlier, the reserves had dropped by $278.91m from $35.87bn on July 29 to $35.59bn on August 19.

According to the country’s apex bank monthly economic report for the month of April, Nigeria’s international reserves increased from $33.69bn at the end of March to $36.46bn at the end of April 2020, reflecting the receipt of the proceeds of the International Monetary Fund’s Rapid Financing Instrument of $3.4bn.

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The level of import cover (such as the value of gross international reserves, relative to the value of merchandise imports and services payment) increased from 3.8 months in March to 4 months in April, above the IMF threshold of 3 months, the report showed.

The Central Bank has said during the last Monetary Policy Committee meeting that the country’s exchange rate was still being affected by volatility in crude oil prices.

According to the bank, the volatile nature of oil prices would continue to have implications for the country’s macroeconomic aggregates.

The aggregates, the MPC stated, included domestic revenue, foreign exchange earnings, exchange rate development, price formation, capital inflows, external reserves, and balance of payments position.

According to the MPC, the impact of the continued lockdown of major economies and restrictions on travel and trade will continue to be felt by the Nigerian economy through the short supply of essential imports; rise in inflation through high import prices and exchange rate depreciation; and impact of continued uncertainties and volatility of the oil market on macroeconomic stability.

Mr Godwin Emefiele, the CBN Governor, at the last MPC meeting, reiterated the need for the government to urgently reduce its reliance on oil revenue by gradually diversifying the economy and improving tax collection.