Global financial service firm JP Morgan has estimated Nigeria’s net foreign reserve to be $3.7 billion, and not 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 bank said 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.
It added 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).
It estimated currency swaps by backing out forex forwards and outstanding Over The Counter (OTC) Futures balances from an overall aggregate published in the financial accounts.