Posted by By Ayodele Aminu on
As a result of fall in price of crude oil in the international market, Nigeria's external reserves slid further to $41.95 billion as at March 9, 2007.
…Currency-in-circulation now N725bn
As a result of fall in price of crude oil in the international market, Nigeria's external reserves slid further to $41.95 billion as at March 9, 2007.
The new figure indicates a 3.3 per cent over the level of $43.392 billion recorded as at February 12.
According to Summary of Economic Indicators for Week-Ended March 9, 2007, obtained by THISDAY, of the $41.95 billion external reserves, the excess crude proceeds accounts for over $9 billion (about N1.152 trillion).
The Central Bank of Nigeria (CBN), however, noted that the present level of reserves can finance more than 25 months of foreign exchange disbursement at the current rate of foreign reserves commitments.
It would be recalled that the external reserves fell between January 31 and February 6, 2007.
From its level of $43.586 billion on January 31, it dropped to $43.425 billion on February 1, $43.421 billion on February 2, $43.414 billion on February 5, and $43.253 billion on February 6.
Commenting on the latest slide, a top CBN official explained that it might not be unconnected with the London Club debt repayment and the funding of the foreign exchange (forex) market.
The CBN's Summary of Economic Indicators also noted that currency in circulation stood at N725.42 billion as at March 9, 2007.
'The actual inflation rate as at end-January 2007 was eight per cent (year-on-year). The average interest on savings account was 3.46 per cent as March 9, while the average weighted prime lending rate of banks stood at 17.74 per cent.
'The weighted maximum lending rate of banks stood at 18.20 per cent as at March 9. The average price of Nigeria's reference crude, Bonny light, stood at $62.66 per barrel, 'the report added.
The CBN disclosed that average volume of output of crude oil stood at 2.15 million barrels per day, as against the budget of 2.5 million barrels per day for 2007.
This development may have been responsible for why the three tiers of government had to share N156 billion from the Excess Crude Proceeds Account, to beef up the revenue loss as a result of the drop in crude oil production.
Finance Minister, Mrs. Nenadi Usman, had last week said the three tiers of government had to withdraw from the excess crude account in order to be able to fully implement their respective budgets for this year.
She explained, 'We are witnessing shortages in revenue because of the drop in production of crude oil. If you remember, the key assumption we had for the 2007 budget is that we will be producing 2.5 million barrels per day at $40 per barrel.
'Production has gone down slightly, which means that there has been a shortfall in revenue if you calculate at the reduced oil production. So, we need to make up for the shortfall.