The monetary authority is in a good position to ease foreign exchange (FX) pressure as its coffers have been enhanced by a sizable $7.3 billion liquidity – $4 billion Eurobond issuance and $3.3billion special drawing right (SDR) from the International Monetary Fund (IMF).
These were among the projections of EFG Hermes, in its report titled, ‘The Year Ahead 2022 – Recovery intact, but expect volatility.
The report mentioned that a number of local banks have been active in the international debt market, raising billions of dollar, which will help improve FX liquidity.
The report stated: “We are less optimistic that this position can lead to a sustainable improvement in FX conditions. First, the country has failed to benefit from the high oil price environment, marking another disappointing development in Nigeria’s economy.”
It stated that a sharp 20 to 30 per cent drop in crude oil production and a sisable fuel subsidy bill have eaten up much of the benefit of rising oil prices, leaving the Central Bank of Nigeria (CBN) struggling to build the external foreign reserves.
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