Global financial service firm JP Morgan has estimated Nigeria’s net foreign reserve to be $3.7 billion, a figure very well below the $33.8 billion stated on the Central Bank of Nigeria (CBN) website last week.
JP Morgan’s estimate is much lower than the net figure of $14 billion reported at the end of 2021.
The bank disclosed this in its latest report on Nigeria titled “Nigeria: Reform pause rather than fatigue”.
It noted that the forex reserve is the result of larger currency swaps and borrowings against the forex reserve.
The global financial institution said: “Based on partial information from the audited financial accounts, we estimate that CBN’s net forex reserves were around $3.7 billion at the end of last year, from $14 billion at the end-2021.”
The assumptions were made after the bank added $5 billion in International Monetary Fund Special Drawing Rights (SDRs) to external reserves, resulting in total gross foreign reserves of US$37.8 billion.
This, it added, was largely in line with the central bank’s prior 30-day moving average of US$37.08 billion, which was published on the central bank’s website.
It went on to say that the gross external reserves were adjusted with three important forex liability lines: forex futures ($6.84 billion), securities lending ($5.5 billion), and currency swaps ($21.3 billion).
It calculated currency swaps by subtracting forex forwards and outstanding over-the-counter (OTC) futures balances from the overall total stated in the financial accounts.
