Nigeria’s
foreign exchange buffer rose 3.75 per cent to $34.78 billion by May 12, 2020
(month-to-date) the latest data posted on the website of the Central bank of
Nigeria (CBN) showed Wednesday.
The country’s foreign exchange reserves moved from $33.52 billion at the end of
last month (April) to $34.78 reversing the trend of downward movement in the
buffer in the wake of the COVID-19 pandemic and accompanying sharp decline in
global oil prices.
The increase in Nigeria’s forex buffer narrowed the year-to-date decline to 9.61 percent, as the forex reserves were at $38.48 billion on January 4.
“A recovery of sorts is assured now that the IMF has disbursed $3.40 billion under its Rapid Financing Instrument (RFI) to tackle the impact of Covid-19.
“Additional
concessional financing is likely from other partners, notably the World Bank
and African Development Bank groups. Such inflows flow directly into reserves.
The cash from the RFI has already been banked”, analysts at United Capital
projected in the week.
Nigeria had announced the receipt of $311.7 million from stolen money recovered
for the late head of state Sani Abacha from the United States and New Jersey
last week, an amount said to have added up to the nation’s stock of external
reserves.
The International Monetary Fund (IMF) recently approved $3.4 billion loan for
Nigeria under the Rapid Financing Instrument (RFI).
Notwithstanding the recent rise in the forex receipt, analysts said Nigeria’s external buffer may be under threat from the backlog of demand from Foreign Portfolio Investors (FPIs) waiting to repatriate a portion of their divestment from the equity and debt market, which has been estimated at close to $.8 billion.