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Nigeria’s fx reserves rise to $35.74 bln by Oct 2, yet to reflect P&ID refund

By on October 6, 2020 0 148 Views

Nigeria’s foreign exchange reserves rose marginally to $35.74 billlion month-on-month by October 2, compared with $35.66 billion a month earlier, the Central Bank of Nigeria (CBN) said on Tuesday.

Latest foreign exchange reserves position of the bank posted on its website showed that the forex buffer is yet to reflect the inflow of around $200 million refund on guarantee placed as security for the stay of execution granted Nigeria in the case between the country and Process and Industrial Development Limited (P&ID).

The CBN Governor, Godwin Emefiele had last week said the country’s forex buffer is expected to receive a boost following a London Court ruling that the sum be released to Nigeria after rejecting the pleas of P&ID to increase the guarantee to $400 million.

However, the country’s foreign exchange reserves have not significantly increase in proportion to the amount of inflow expected from the court ruling.

READ ALSO: Nigeria’s equity market gains on low yields, interest rate regime

Nigeria currently facing dollar shortage in the wake of impact of the corononavirus pandemic on the social-economic condition across the globe which impacted negatively the country’s oil revenue.

Ther government said the country revenue has dropped by more than 60 percent due to the sharp drop in oil revenue and decline in production out put cut effected by the Organisation of Petroleum Exporting Countries (OPEC) to stabilise the market.

Senior officials of a multinational firm told our correspondent that the economy may experience serious shortage in essential items in the coming months due to the inability of the CBN to meet demand at the domestic foreign exchange market.

Nigeria’s forex buffer stood at $38.53 billion at the begining of the year and has progressively decline over the months in spite of devaluation of the naira by the CBN to curb speculations and increase demand for the dollar.

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