Emefiele attributes declining forex earnings to dwindling crude oil price —
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Emefiele attributes declining forex earnings to dwindling crude oil price



GOVERNOR of the Central Bank of Nigeria, CBN, Godwin Emefiele, has said that Nigeria’s foreign exchange earnings, as well as revenue accruable to the federation account continued to nose dive as a result of declining crude oil prices at the international market.
Emefiele, who stated this during the Chartered Institute of Bankers’ of Nigeria, CIBN, Conference in Abuja on Tuesday, said the pandemic has resulted in the foreign reserves dropping from over $48billion to the current $36billion.
Emefiele, who also decried the cut in the country’s crude oil production quota in compliance with the Organisation of Petroleum Exporting Countries, OPEC, resolution last April as a of the impact of COVID-19, explained that although crude oil prices are gradually firming up from about $19 per barrel in April 2020 to about $42 per barrel currently, the price is yet to return to the pre-pandemic average level of over $60 in January 2020.
“Drop in crude oil earnings as well as the drop in foreign portfolio inflows, significantly affected the supply of foreign exchange into Nigeria, with the Naira depreciating at the official window from N305 to the dollar to N360 to the dollar and N380 to the dollar,” he said.
Emefiele also stated that during the first half of 2020 policy measures adopted to contain the spread of the virus caused a significant shock to the country’s economy, with the downturn in economic activity significantly impacted in the second quarter of the year.
The downturn, he noted, was driven by a series of external factors, including lockdown measures imposed in order to curtail the spread of the virus, which had a significant effect on a number of sectors.
Emefiele also noted that although the lockdown significantly impacted economic activity, saying that it had to be done to prevent an uncontrolled spread of the virus.
CBN governor said emergency policies adopted to contain the COVID-19, resulted in the Nigerian economy contracting by 6.1 per cent in the 2nd quarter of 2020, down from a positive growth of 1.87 per cent recorded in the 1st quarter of 2020.
He said while these results were negative, it was well below the forecasts, including those of the World Bank and the International Monetary Fund IMF, which projected a worse contraction of above 7.4 per cent.
To boost the capacity for in-country production of items, Emefiele said the apex bank has continued to adopt policy measures to further conserve the country’s external reserves.

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