• Home
  • News
    • African News
    • Nigerian
    • World
    • News UK
    • Politics
  • Sports
  • Business
  • Entertainment
  • Health
Nigerian Watch Newspaper
Nigerian Watch Newspaper
 
 
  • Home
  • News
    • African News
    • Nigerian
    • World
    • News UK
    • Politics
  • Sports
  • Business
  • Entertainment
  • Health
Home
Headline

Nigeria’s foreign reserves fall to two-year low but look set to rebound as Middle East crisis looms

January 8th, 2020 Business, Headline, News, Nigerian, Politics, World comments

Nigeria’s foreign reserves fall to two-year low but look set to rebound as Middle East crisis looms

NIGERIA’S foreign reserves have fallen to a two-year low of $39.84bn according to a recent economic report published by the Financial Derivatives Company as crude oil sales remained below government projections over the last quarter.

 

With her economy tied to the fate of global petroleum prices, Nigeria’s budget is predicated on the country selling 2m barrels of crude a day at $60 a barrel. Although prices have been above $60 a barrel lately, Nigeria has an organisation of Petroleum Exporting Countries (Opec) quota of 1.68m barrels a day, less than the 2m barrels upon which the budget is based.

 

This has meant that the government needs to dip into its foreign reserves and resort to borrowing to fund its budget. Fortunately for Nigeria, however, global oil prices have risen over the last week to about $70 a barrel as a result of the spat between the US and Iran and could rise higher if the altercation escalates any further.

 

According to the report, Nigeria’s quarterly oil revenue could hit $15bn as the market reacts to the US-Iranian standoff. Nigeria’s foreign reserves stood at $39.65bn on November 21, 2019, compared with $40.33bn as at end of September 2019.

 

Central Bank of Nigeria (CBN) data showed that the reserves were $43.83bn at end of December, 2012 as against $68bn in August 2008 before the global financial crises impacted negatively on them. Over recent years, the CBN has maintained that inflows into the reserves was not consistent with oil prices, pointing out that this underscores the need for tighter fiscal controls around oil revenues.

 

Also, the bank said there was an urgent need to pursue policies that would foster macro-economic stability, economic diversification as well as encourage foreign capital inflows. It said a higher rate of retention of oil revenues should facilitate the efforts at maintaining exchange rate stability as an antidote to imported inflation, even without excessive reliance on monetary tightening measures.

 

Earlier today, President Muhammadu Buhari met with the group managing director of the Nigeria National Petroleum Corporation (NNPC), Mela Kyari, at the Presidential Villa in Abuja. Later today, President Buhari who also serves as Nigeria’s minister of petroleum resources, will also be meeting with the minister of state for petroleum Timipre Sylva, to discuss the current global situation.

 

Brent crude, the global benchmark, gained 2.4% to reach $70.24 per barrel on Monday, the first time prices have hit that amount in more than seven months. Whenever there is conflict in the Middle East, the price of crude oil has always soared, making Nigeria one of the world’s major beneficiaries, along with other Opec nations.

Facebook Twitter Google+ LinkedIn WhatsApp
Next article My vision 2050 dream is anchored on the creation of the superpower to be known as the People’s Republic of Songhai
Previous article APC vice chairman southwest advises other zones to replicate the launch of Operation Amotekun

Related Posts

I look forward to seeing which of the presidential aspirants will come up with an FDI-funded development plan that looks like this African News

I look forward to seeing which of the presidential aspirants will come up with an FDI-funded development plan that looks like this

Osogbo court rules that Senator Adeleke is the bonafide PDP gubernatorial candidate African News

Osogbo court rules that Senator Adeleke is the bonafide PDP gubernatorial candidate

Federal government slams Northern Elders Forum for saying some parts of Nigeria could secede African News

Federal government slams Northern Elders Forum for saying some parts of Nigeria could secede

Facebook Comments

 

Follow Us on Facebook


Follow us on Twitter


Follow nigerianwatch on TwitterTweet

  • About us
  • Legal agreement
  • Privacy policy
  • Contact us
  • Back to top
© 2012 - Nigerian Watch. All rights reserved.
Website by Mouldme.com