The Naira yesterday slid for a third day
on slumping oil prices and production will weaken the country’s foreign
exchange reserves and government finances.
The currency depreciated 0.2 per cent to
158.63 per dollar and has retreated 1.6 per cent this year, according
to data compiled by Bloomberg.
Qua Iboe and Bonny Light crude, the
nation’s main export grades, both slid for a seventh day to their lowest
levels since July 2012. “This implies that the government will be less
able to build up reserves in the Excess Crude Account, thereby exposing
the economy to a possible oil price shock.
“In addition, the oil benchmark price
was increased from the previous year’s budget, while global oil prices
are expected to average lower this year than in 2012,” Melissa
Verreynne, an analyst at NKC Independent Economists said.
Nigeria sets a price per barrel when
calculating oil revenue in the budget, and saves any money collected
above that level in the Excess Crude Account to meet spending
shortfalls.
President Goodluck Jonathan in February
approved this year’s budget after lawmakers raised the benchmark oil
price to $79 a barrel from the $75 proposed by the government.
The Central Bank of Nigeria (CBN) uses
the country’s reserves to stabalise the naira, selling dollars to
lenders at twice-a-week auctions.
Source: The Nation Online
HBC: Hia! Wetin this one mean *Looking Confused*, are we going to die? Cos It sounds Bad OoOoh. Oya Economist dem weh dey dis house, mek una explain to us wetin dis one mean as I no come go better school nah ejoor!...lol!
No comments:
Post a Comment
To enter your comments: Type the comment, select a profile in the "Comment as" drop-down box. U may select "Name/URL" if u want ur name to appear then u can now enter ur name and ignore the URL part. Click Continue and lastly, Click publish. But u can pick "anonymous" if you don't want ur name in the comment or choose "Google Account" if you have a gmail account.