JP Morgan has estimated Nigeria’s net foreign reserve to be around $3.7 billion, below the $33.8 billion posted by the Central Bank of Nigeria (CBN) on its website as of August 17.
The global financial resource firm’s estimate is much lower than the net figure of $14 billion reported at the end of 2021 as shown in its latest report on Nigeria titled “Nigeria: Reform pause rather than fatigue”.
JP Morgan noted that the lower-than-reported forex reserve is the result of larger currency swaps and borrowings against the forex reserve.
“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 firm said.
According to the bank, the assumptions followed an addition of $5 billion in International Monetary Fund Special Drawing Rights (SDR) to external reserves to arrive at total gross forex reserves of US$37.8 billion.
This, it said, was broadly in line with the 30-day moving average of US$37.08 billion previously published on the central bank’s website.
The global financial resource firm explained that by adjusting the gross external reserves with three key forex liability lines that include forex forwards ($6.84 billion), securities lending ($5.5 billion) and currency swaps ($21.3 billion).