“External reserves may fall to $29.9bn by December 2020”

THE Central Bank of Nigeria (CBN) has expressed concern that  the external reserves would be pressured lower to between US$29.9billion and US$34.3billion by the end of December 2020.

Based on excerpts from the CBN’s recently published Monetary Credit, Foreign Trade and Exchange Guidelines for Fiscal Years 2020-2021, the bank expressed concerns on outlook for the country’s external reserve and exchange rate.

According to the report, the CBN primarily highlighted the following risks as significant concerns for accumulation in external reserves; worsening current account balance, decline in oil price, and risk aversion on the part of investors which would affect capital inflows.

The  apex bank concluded that these factors combined with speculative activities at the I&E window and Bureau De Change (BDCs) would exert pressure on the exchange rate.

Exchange rate and external reserves have been pressured in 2020 due to decline in oil receipts and mounting capital reversals among foreign portfolio investors (FPIs).

Stakeholders had observed that the CBN has been reluctant to intervene actively in the different segments of the markets following the significant dip in April.

Nevertheless, dollar loans from IMF (US$3.4bn in April 2020) amidst limited interventions in the foreign exchange (FX) market has supported accretion in the external reserves in recent months.

However, analysts said the limited intervention in the various segments of the FX market has led to a backlog of FX demand estimated at US$7billion.

Furthermore, “we expect the country to continue running a trade deficit for the rest of the year as oil receipts which accounts for over 70per cent of export earnings remain weak.

“Lastly, with huge Open Market Operation (OMO) maturities expected till year end, we expect demand from FPIs who want to repatriate their funds to exert further pressure. That said, we expect the wide premium between the parallel market and I & E window to remain even if the CBN decides to supply the needed FX to clear the backlog of demand,* one dealer said.

[BREAKING] #EndSARS: IGP Disbands SARS Across The 36 States

In the finest spirit of democracy and response to the people’s yearnings, the Inspector-General of Police Mohammed Adamu has today, 11th October, 2020, dissolved the Special Anti-Robbery Squad (SARS) across the 36 State Police Commands and the Federal Capital Territory (FCT) where they hitherto existed.

#OndoDecides2020: Pandemonium In Akure Polling Unit As Gunmen Disrupt Voting

Pandemonium erupted in Akure on Saturday morning, as gun-wielding men suspected to be political thugs invaded a polling unit located at unit 4, ward 4, Ijomu/Obanla, in Akure South Local Government Area of the state.