The Central Bank of Nigeria (CBN) says the country’s foreign exchange reserves are at risk due to the petrol subsidy removal and lower crude oil earnings.
As of September 12, Nigeria’s external reserves stood at $36.08 billion, according to data from the CBN.
In its ‘Monetary, Credit, Foreign Trade, and Exchange Policy Guidelines for the Fiscal Years 2024-2025,’ published on Tuesday, CBN also said increased external debt servicing obligations could pose downside risks for the growth of external reserves during the period.
“Lower crude oil earnings, fuel subsidy removal, rising import bills and increased external debt servicing obligations could pose downside risks for the accretion to external reserve,” CBN said.
“In addition, the sustained monetary policy tightening by central banks across advanced economies increases the risk of capital outflow.”
Nevertheless, the financial regulator said the outlook for Nigeria’s external sector in 2024 and 2025 is optimistic, on the expectation of favourable terms of trade, occasioned by a sustained rally in crude oil prices and an improvement in domestic crude oil production.
CBN also said the positive outlook is supported by the sustenance of crude oil prices, propelled by the decision to cut production, and gains from capital flows and remittances
