By Adedapo Adesanya

Governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele, has said the likelihood of the apex bank devaluing the Naira is on the happenstance that the nation’s external reserves go below $30 billion and the international price of crude oil drops to $45 per barrel.

Mr Emefiele, according to a CBN publication, made this disclosure while speaking with potential investors in London, United Kingdom, on Wednesday.

The CBN chief was confident that the reserves were unlikely to drop to $30 billion due to the various policies put in place by the federal government as part of its plans to diversify the Nigerian economy.

Due largely to the tension between the United States and China, oil demand has been affected, leading to lower prices. However, the CBN boss noted that oil prices would need to weaken to 40 percent to create a scenario that would see that the bank not being able to maintain the stability of exchange rates across various segments.


As at the time of this report by Business Post, it was observed that price of the Brent Crude, under which Nigeria’s crude is categorized, was trading close to $64 per barrel, higher than the $60 and $57 benchmark in the 2019 and 2020 budgets respectively.

On the other hand, the external reserves, currently at $39 billion, would need to shed about 30 percent for the government to put in place any corrective measure and this was not the case.

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Mr Emefiele’s interactions with investors came after signs of a growing backlog of foreign exchange demand. The central bank recorded a less foreign exchange inflows than outflows in the third quarter of 2019. This would be the third time such would occur in almost four years since the foreign exchange crisis of 2016 and the first time in 2019.

Also, net forex outflow in the third quarter was $3.6 billion, being the difference between inflows of $11.7 billion against outflows of $15.3 billion. This implies that net forex outflows may put pressure on the exchange rate which the CBN, through its interventions, has protected at all costs for more than two years.

Lower dollar inflows reduce the CBN’s capability in defending the Naira against any depreciation as it affects the country’s external reserves.

The CBN’s gross external reserves are already on the decline, after shrinking 12 percent from $45 billion at the start of the year.

Foreign investors have been particularly worried by the trend which surely rekindles bitter memories from 2016 when the foreign exchange backlog swelled to as much as $7 billion as investors could not take out their money.

https://businesspost.ng/economy/emefiele-reveals-when-cbn-will-devalue-naira/amp/

Look at these people.

Chai.

So finally, they are starting to prepare for the worst they imposed on us.

Something we could have done since and by now, we will know the true state of things and emefiele was forming Thanos.

Yeye CBN. .

Go ahead and keep defending Naira.

Never seen a confused CBN more than the one headed by this emefiele.

This is the news I love to know about as it helps me to make decisions on my business. As a business person, I should know when to withdraw huge amount to invest than allowing the money loose value in my bank accounts. That's why I love my buying and selling. It is better than salary.

He went to alert his masters.

It's time to get ready for another kill in Nigeria.

valenu:
This is the news I love to know about as it helps me to make decisions on my business. As a business person, I should know when to withdraw huge amount to invest than allowing the money loose value in my bank accounts. That's why I love my buying and selling. It is better than salary.

Can you introduce someone to the buying and selling biz Thanks in advance.

dipoolowoo:
As at the time of this report by Business Post, it was observed that price of the Brent Crude, under which Nigeria’s crude is categorized, was trading close to $64 per barrel, higher than the $60 and $57 benchmark in the 2019 and 2020 budgets respectively.

How recent is this news? Cos I'm aware that oil prices plunged in early trading on Monday, going at one point to as low as $27 before recovering a bit to hover around $32.

If Saudi continues its price war and oil prices remain below $40, then all countries who depend on oil to balance their budget (Nigeria, Venezuela, Angola, etc) are in for some tough time.

I'm not interested in discussing politics but pure economics. The government will have no option but to devalue the naira, else it will not be able to meet its obligations such as salaries and payment to contractors. Also, since there will be fewer dollars earned, a devaluation will be necessary to discourage some imports else the foreign reserve will just get wiped out by import bills.

Thesame think happened in 2015 but Buhari refused to "devalue " the naira for two whole years. It was only his sickness that allowed Osinbajo to save us

Somehow, I believe Meffy wished he didnt give these figures as pointers when he granted that interview weeks back.

Now, he has given free market info to Speculators.

Oil now is below $45( and maybe we will even see $20 Oil Price in year 2020).

Liquid Unencumbered Reserves are now about $35bn.

Many thought this will be at Q4-2020 or H1-2021. But It is now fastracked in a way even the president will now have to condescend and allow a shift in the exchange rate.

Who listen to these dull heads but fools like themselves.

In the first place, what determines Economics if not Politics dummies. Watch their warped reverse logic. What imports can you buy with devalued naira?

These mental slaves will never stop until naira turns into Zimbabwe dollars. They have never wished Nigeria any good anyway.

Ndi Ara

Hmm

Crude oil is trading at about $35 because of Corona virus

sholatech:
Somehow, I believe Meffy wished he didnt give these figures as pointers when he granted that interview weeks back.

Now, he has given free market info to Speculators.

Oil now is below $45( and maybe we will even see $20 Oil Price in year 2020).

Liquid Unencumbered Reserves are now about $35bn.

Many thought this will be at Q4-2020 or H1-2021. But It is now fastracked in a way even the president will now have to condescend and allow a shift in the exchange rate.

God bless you, I wonder the type of daft leaders we have.

Dis man don extend is bad luck from is country, come go affect d international market.

SAN FRANCISCO, March 12, (THEWILL) – Central Bank of Nigeria, CBN, Thursday night said it has enough foreign exchange reserves to maintain the current value of the naira and warned currency speculators to stop rumour mongering and causing panic in the market.

See your empty economics without politics?

Impenia:
How recent is this news? Cos I'm aware that oil prices plunged in early trading on Monday, going at one point to as low as $27 before recovering a bit to hover around $32.

If Saudi continues its price war and oil prices remain below $40, then all countries who depend on oil to balance their budget (Nigeria, Venezuela, Angola, etc) are in for some tough time.

I'm not interested in discussing politics but pure economics. The government will have no option but to devalue the naira, else it will not be able to meet its obligations such as salaries and payment to contractors. Also, since there will be fewer dollars earned, a devaluation will be necessary to discourage some imports else the foreign reserve will just get wiped out by import bills.

Brace up Nigerians. Time to make money from diversification.