Concerns over the nation’s foreign exchange reserves have been voiced by the Central Bank of Nigeria (CBN), which cited possible dangers associated with the elimination of the petrol subsidy and decreased earnings from crude oil.
Based on data from the CBN, Nigeria’s external reserves were $36.08 billion as of September 12, 2024.
The CBN emphasised the difficulties presented by growing external debt servicing commitments in its recently released “Monetary, Credit, Foreign Trade, and Exchange Policy Guidelines for the Fiscal Years 2024-2025,” which could have a detrimental effect on the buildup of external reserves during the time.
The CBN said; “Lower crude oil earnings, fuel subsidy removal, rising import bills and increased external debt servicing obligations could pose downside risks for the accretion to external reserve.
“In addition, the sustained monetary policy tightening by central banks across advanced economies increases the risk of capital outflow.”
The CBN is upbeat about Nigeria’s external sector prospects for 2024 and 2025 in spite of these obstacles.
Because of increases in domestic crude oil output and a sustained increase in crude oil prices, the regulator anticipates favourable terms of trade.
The CBN further stated that the country’s foreign reserves are strengthened by capital inflows and remittances, as well as the sustained increase in crude oil prices brought on by production cuts.
A Gentle Reminder: Every obstacle is a stepping stone, every morning; a chance to go again, and those little steps take you closer to your dream.
Nnamdi Okoli
