By Obinna Chima
Nigeria’s external reserves dropped by $286 million (0.8 per cent) to $35.899 billion as at July 28, 2020, compared to the $36.185 billion it was at the end of June, 2020, data obtained from the Central Bank of Nigeria (CBN) website yesterday has shown.
The development has been attributed to the disruptive impact of the Covid-19 which slowed down foreign portfolio inflows into the country, as well as subdued oil prices.
The benchmark Brent crude closed at $43 per barrel yesterday.
The CBN recently adjusted the official exchange rate from N360 to a dollar to N380 to a dollar.
CBN Governor, Mr. Godwin Emefiele, recently stressed that at its current position, Nigeria’s external reserves remains strong.
“I still need to underscore the fact that Nigeria’s reserves still stand at around $36 billion which is strong. Indeed, Nigeria has not even touched the $3.4 billion loan it took from the International Monetary Fund (IMF), which is a sign of prudence and being cautious to say ‘let’s be prudent in spending our money’. I can say that the market is stable,” he explained after the latest Monetary Policy Committee meeting.
Meanwhile, the Manufacturing Purchasing Managers’ Index in the month of July stood at 44.9 index points, indicating contraction in the manufacturing sector for the third consecutive month.
According to the latest PMI report posted on the CBN’s website, of the 14 surveyed sub-sectors, transportation equipment sub-sector reported growth (above 50% threshold) in the review month while non-metallic mineral products sector reported no change.
However, the remaining 12 sub-sectors reported contraction in the following order: printing and related support activities; primary metals; fabricated metal products; paper products; food, beverage and tobacco products; chemical and pharmaceutical products; furniture and related products; electrical equipment; plastics and rubber products; petroleum and coal products; textile, apparel, leather and footwear and cement.
Furthermore, the report showed that at 44.7 points, the production level index for the manufacturing sector declined in July 2020 for the third consecutive month.
One sub-sector recorded increased production level, four remained unchanged, while nine subsectors recorded declines in production in July 2020.
“At 43.1 points, the new orders index show contraction for the third consecutive month in new orders index in July 2020. It however grew by 6.7 points above the level recorded in June 2020.
“Two sub-sectors reported expansion, three remained unchanged while nine sub-sectors recorded contraction in the review month. The manufacturing supplier delivery time index stood at 56.4 points in July 2020, indicating faster supplier delivery time for the third consecutive month.
“Ten of the 14 sub-sectors recorded improved suppliers’ delivery time, two sub-sectors reported no change while the remaining two recorded slower delivery time in July 2020,” the CBN report added.