Nigeria: Foreign Reserves Deplete by $68.6m
By Ashemiriogwa Emmanuel
The total amount on the Nigerian foreign reserves depleted by $68.6 million or 0.2 per cent to $33.52 billion on Thursday, August 19, 2021, from the $33.58 billion it recorded as of Thursday, August 12, 2021.
Data sourced by Business Post from the Central Bank of Nigeria (CBN) showed that the amount in the country’s external savings initially gained $18.4 million within August 5 and August 12, raising the buffers to N33.58 billion.
However, the FX reserves started to record a downward movement last week until the amount settled at $33.52 billion last Thursday.
The continued decline in the movement of the nation’s external buffers is due to the drop in the price of crude oil in six consecutive days amid the spike in fresh COVID-19 cases globally which is the most sustained losing streak since February 2020.
As of Thursday last week, Business Post said in one its reports that the price of the commodity dropped to $66, indicating the lowest since May, chiefly as a result of low demand and a stronger US dollar.
While this has played an obvious effect on the nation’s FX reserves, there have been projections lately that the amount would hit the $40 billion threshold by September 2021 after the International Monetary Fund (IMF) credits the account of the CBN with $3.35 billion Special Drawing Rights (SDRs).
The country expects this money from the global lender on Monday, August 23, 2021 (today).
Meanwhile, the federal government has confirmed that the sale of the $6.2 billion Eurobonds will commence in September with the aim of raising funds to finance the 2021 Appropriation Act deficit.
The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, confirmed this when she spoke at a workshop held in Abuja last week.
At the event, the Minister mentioned that “the Federal Government of Nigeria has accessed the international capital market to finance the needed capital deficits” and “the next round of bond issuance will be sold sometime in September this year and we have had positive indications in that regard.”
When this external capital is sourced by the government, the nation’s reserves should hit nearly $45 billion.