NNPC Remits $0 to Forex Reserves from Crude Oil Sales—CBN

By Modupe Gbadeyanka

The Governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele, has disclosed that the Nigerian National Petroleum Company (NNPC) Limited has not been remitting proceeds from the crude oil sales to the nation’s foreign exchange reserves.

Speaking over the weekend at the 57th annual bankers’ lecture sponsored by the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos, the banker said this has been happening for a while.

According to him, prior to the inception of the administration of President Muhammadu Buhari, the oil firm was paying $3 billion into the country’s FX buffers, but at the moment, nothing is remitted.

This may have made it very difficult for the apex bank to defend the Naira in the forex market as the value of the local currency has crumbled due to forex liquidity issues.

“The official foreign exchange receipt from crude oil sales into our official reserves has dried up steadily from above $3.0 billion monthly in 2014 to an absolute zero dollar today,” Mr Emefiele told the participants at the event.

However, he assured that the bank would do everything possible to boost the external reserves by looking into non-oil exports.

According to him, the short-term outlook of the Nigerian economy remains good because of the different policies put in place by the fiscal and monetary authorities.

He disclosed that monetary policy would remain focused on the objectives of price, monetary, and exchange rate stability, noting that “We will maintain the current tight monetary policy stance in the near-term, especially in view of rising inflation expectations and exchange market pressures.”

Recall that last week, the monetary policy committee (MPC) of the central bank voted to increase the benchmark interest rate at its meeting. The Monetary Policy Rate (MPR) was subsequently raised to 16.5 per cent from 15.5 per cent last Tuesday.

At the bankers’ programme held last Saturday, the apex bank chief said, “The CBN, guided by best judgement and data, will continue to act in good faith to ensure the increased prosperity of the Nigerian economy.”