The Central Bank of Nigeria (CBN) says Nigeria’s foreign reserves will drop below $34.3 billion by the end of December 2020.
The apex bank made this known in its report titled ‘Monetary, Credit, Foreign Trade and Exchange Policy Guidelines for Fiscal Years 2020/2021’ released on Sunday.
The CBN said by the end of 2020, Nigeria’s foreign reserve is expected to between $29.9 billion and $34.3 billion.
It said the prediction is based on declining oil prices and the impact of the coronavirus pandemic.
“Sequel to the COVID-19 pandemic, the viability of the external sector in 2020 is expected to deteriorate, given the present worsening current account balance and depletion of external reserves driven, largely, by decelerating export receipts, particularly oil,” the report read.
“Specifically, the degree of external reserves accumulation is expected to decelerate, as outflows are expected to outweigh inflows.
“As a result, external reserves are expected to lie between $29.9 billion and $34.3 billion at end-December 2020 (predicated on current declining oil price between $20 and $40).”
According to the report, Nigeria’s foreign reserve grew marginally by $58.464 million in September.
As of August 29, the reserve stood at $35.665 billion and grew to $35.724 billion as of September 29.
The reserves had continued its upward movement, rising from $35.67 billion as of September 1 to $35.81 billion on September 17.
Prior to September, the reserves rose by $65 million from $35.59 billion as of August 20 to $35.66 billion as of August 27.
This prediction means that Nigeria may not set a new high record as it did in 2019 when it opened the year at $43,075,740,908 to break a six-year record.
The last time Nigeria’s reserves opened above $42 billion was in 2013 when it opened the new year at above $45 billion.