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LequteMan
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A sharp drop in global oil prices has raised the twin spectres of a potential currency devaluation and budget shortfalls in Nigeria as a closely fought and costly presidential election approaches.
Excerpt from Reuters:
Nigeria, the continent’s top producer, relies on oil for only 14 percent of its gross domestic product (GDP) but crude makes up 95 percent of foreign exchange and about 80 percent of government revenues, both of which have shrunk rapidly as Brent crude lost more than a quarter of its value since June.
Foreign portfolio investors fearing heavy losses on the currency have pulled out — the main share index hit a 16-month low and the yield on government bonds rose 10 basis points on Wednesday.
Foreign reserves fell rapidly from a peak of $48.9 billion in May 2013 to just $36 billion in June. They have since rebounded slightly and are currently around $38.3 billion.
Despite these losses, analysts say that a devaluation before the elections, when President Goodluck Jonathan will seek a second term, would be so unpopular that it’s unlikely unless oil prices, now at $82 a barrel, tumble further and force the bank’s hand.
click here to read more
#Nigeria #Dollar #Naira #GDP
Excerpt from Reuters:
Nigeria, the continent’s top producer, relies on oil for only 14 percent of its gross domestic product (GDP) but crude makes up 95 percent of foreign exchange and about 80 percent of government revenues, both of which have shrunk rapidly as Brent crude lost more than a quarter of its value since June.
Foreign portfolio investors fearing heavy losses on the currency have pulled out — the main share index hit a 16-month low and the yield on government bonds rose 10 basis points on Wednesday.
Foreign reserves fell rapidly from a peak of $48.9 billion in May 2013 to just $36 billion in June. They have since rebounded slightly and are currently around $38.3 billion.
Despite these losses, analysts say that a devaluation before the elections, when President Goodluck Jonathan will seek a second term, would be so unpopular that it’s unlikely unless oil prices, now at $82 a barrel, tumble further and force the bank’s hand.
click here to read more
#Nigeria #Dollar #Naira #GDP
