Nigeria’s Reserve Is $3.7b, Not $33.8 billion — JP Morgan Faults CBN (

Nigeria’s Reserve Is $3.7b, Not $33.8 billion — JP Morgan Faults CBN


Global financial service firm, JPMorgan Chase & Co has estimated Nigeria’s net foreign reserve to be around $3.7 billion.

According to the firm, the figure is far below the $33.8 billion reflected on the Central Bank of Nigeria (CBN) website as at August 17.

Information Nigeria understands that JP Morgan’s estimate is much lower than the net figure of $14 billion it reported at the end of 2021.

The firm however projected that the country’s inflation rate will increase to 28 percent in the next four months of the year.

It disclosed this in its latest report on the country titled “Nigeria: Reform pause rather than fatigue: CBN’s financial accounts open a can of worms.â€

JPMorgan further 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 global financial institution said.

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According to the firm, 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 reserve 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.

It cumulated this 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).

It estimated currency swaps by backing out forex forwards and outstanding Over The Counter (OTC) future balances from an overall aggregate published in the financial accounts.

The bank said the CBN still can withstand the pressure accompanying the low forex reserve especially, as profit from swap arrangements between the CBN and commercial banks, continue to rise.

Recall that Nigeria’s July inflation rate soared to 24.08 per cent, occasioned by the hike in fuel pump price to 617/per litre and the depreciation of the Naira against the dollar.

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