Good Morning Nigeria : A huge hole in the BoP, and no filler at hand
​A huge hole in the BoP, and no filler at hand
We see industry estimates that the Chinese authorities would run their official reserves down to zero by December 2018 if they maintained their current very high rate of monthly depletion. Because their Nigerian counterparts failed to build solid buffers when oil prices permitted, they are struggling to contain the depletion of reserves now that fx inflows have slumped. Oil and gas, both dollarized exports, earned US$90.5bn in 2013, and transfers (remittances), the second largest source of inflows, US$22.2bn. We fail to see what could take up the slack before the oil price recovers. From a balance of payments (BoP) perspective, devaluation would not make much difference.
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