Fitch Ratings has revised outlook on Nigeria’s long-term foreign currency Issuer Default Rating to “stable” from “negative” and affirmed the IDR at “B”.
According to the credit rating agency, the revision of the Outlook reflects a decrease in the level of uncertainty surrounding the impact of the Coronavirus Disease on the countries economy.
Basically, Fitch revealed that crude oil prices stabilised at the international market, global funding conditions eased and domestic restrictions on movement largely relaxed.
It stated that Nigeria has navigated external liquidity pressures from the COVID-19 shock through partial exchange rate adjustment combined with de facto capital flow management measures and foreign currency restrictions.
The oil-rich African country supported the level of its external reserves with disbursed external official loans – lately, Nigeria got $3.36bn loan from the International Monetary Fund for boost infrastructure development, Fitch stated.
On the flip side, the credit agency’s report revealed that unfulfilled foreign currency demand could constitute a drain on reserves once FC supply is further relaxed by CBN.
Reportedly, the stock of outstanding non-resident holdings of CBN Open Market Operation bills was around $10bn in August 2020, equivalent to 27.99 per cent of external reserves ($35.73bn) last month.
