Post Views: 237 Latest data from the Central Bank of Nigeria (CBN) website shows that the nation’s external reserves fell to $46.257bn on August 20, f...
Latest data from the Central Bank of Nigeria (CBN) website shows that the nation’s external reserves fell to $46.257bn on August 20, from $47.119bn at the end of July, 2018, representing a decline of $862.23m, or 1.82%.
Month-on-Month however, the reserves level fell by $1.13bn or 2.38% from $47.388bn on July 20, 2018, returning to a level it last touched on March 29, when it hit $47.257bn as it climbed upward.
The reserves level had risen from $38.765bn at the end of December 2017, peaking at $47.865bn on May 5, 2018, accumulating a robust $9.099bn, or 23.47% within the period.
Thereafter, it began a gradual decline, owing to the exit of foreign portfolio investors due to the mounting concerns over the 2019 elections.
In his personal commenting at the April meeting of the Monetary Policy Committee (MPC), released by the CBN, a member, Prof. Adeola Adenikinju, a member, noted the need for the “maintenance of adequate foreign reserves as a hedge against reversal in portfolio investments and cyclicality of the global oil market.”
He equally noted the need for more committed by the Federal Government to sustain “an effective, functional and well-resourced stabilization account that will provide needed buffer for the economy, increase in non-oil tax-GDP ratio, horizontal and vertical diversification of the oil sector, speedy passage of the 2018 budget, payment of contractors’ debts to reduce the NPLs of banks, provision of more credit to the economy by the banking sector, reduction in the maximum lending rates by banks..”
He lamented the “continued depletion of the excess crude account, the monetization and sharing of oil revenues, and foreign debts without any effective stabilization fund… Added to this is the potential spike in domestic spending that is a regular feature of past electoral cycles in Nigeria.
“All of these factors, plus the rising debt profiles of the government, increases inflationary outlook for the economy,” which he said call for the synchronisation of fiscal and monetary policies in Nigeria.