Nigeria’s foreign reserves have hit the 36 billion dollar Mark for the first time since March 17
Data made available on the website of the Central Bank of Nigeria cbn shows that the reserves have been on a steady increase since it hit 33.42 billion dollars in April.
The rise could be attributed to the increase in oil prices at the global market.
the price of crude oil hit $40 a barrel on Thursday after it plummeted because of the covid-19 pandemic that has ravaged many countries across the world.
the Central Bank of Nigeria cbn uses foreign currency like the dollar to keep its local-currency stable. An example was the cbn’s intervention where it’s used the dollar to keep the local currency stable at 360 naira to a dollar.
some countries use a portion of your foreign reserves to fund infrastructure projects like roads railways and bridges just like the case is in Nigeria.
Foreign exchange also used to maintain liquidity in times of crisis. A crisis may limit exporters ability to produce goods and earn foreign exchange to expand their businesses.
Reserves a used to meet external obligations like international service in debt payment and even borrowing like loans.
The cbn currently unified the exchange rate to 400 naira to dollar and mandated all international oil companies to now sell their FX incomes to the cbn at 360 to a dollar as against 325 naira they used to sell to the Nigerian national petroleum corporation nnpc.
(C) Control TV 2020.
