Why Nigeria Must Not Deplete Foreign Reserves - IMF
President Buhari addresses Nigerians at Nigeria’s 58th Independence Anniversary (File image)

The International Monetary Fund (IMF) has cautioned Nigeria over depletion of its foreign reserves as oil prices would soon slump.

Concise had reported that global prices for oil have soared above $80 per barrel,the first time in a long while.

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However, the Head of Emerging Economies Regional Studies Division at the IMF’s European Department, Anna Ilyina has told Nigeria to be cautious of how it spends from the reserves.

Ilyina noted this on Wednesday at the current Annual General Meetings of the IMF/World Bank in Bali, Indonesia.

“A combination of factors has basically affected emerging market since then,” she said.

“It started with sharp appreciation in the dollar due to rising interest rates in the US. In the case of Nigeria, there is one important driver that always affects its economic condition and that is oil.

“Foreign exchange intervention might make sense in certain circumstances. But then, one has to consider the growth in fundamentals, the level of reserves and other policy tools that might be more appropriate in country-specific circumstances.”

Nigeria’s reserves slumped to $44.30bn on September 28 from $45.83bn in August. And on October 9, it went down to $43.52bn on Tuesday.