Nigeria’s foreign exchange (FX) reserves declined significantly by $1.16 billion in January 2025, wiping out the $592.58 million gain recorded in December 2024.
The latest figures from the Central Bank of Nigeria (CBN) show that reserves fell from $40.88 billion at the end of December to $39.72 billion as of January 31, 2025.
This marks the sharpest monthly decline since April 2024 and raises concerns about the country’s external liquidity position.
What does the data say
In April 2024, Naijaonpoint reported that Nigeria’s foreign exchange (FX) reserves have witnessed a significant downturn, plunging by approximately $2.16 billion in 29 days, amidst the Central Bank of Nigeria’s (CBN) robust efforts to stabilize the naira.
Current figures from the CBN, as of April 15, 2024, reveal that the FX reserves are now positioned at $32.29 billion, a stark decline from $34.45 billion recorded on March 18, 2024.
The CBN governor, Yemi Cardoso, blamed the previous decline in April 2024 on debt repayments and other standard financial obligations, rather than efforts to defend the naira.
The January decline follows the CBN’s increased dollar sales to Bureau De Change (BDC) operators as part of efforts to stabilize the naira amid ongoing currency volatility.
The arrangement was to be in effect from December 19, 2024, to January 30, 2025.
However, the CBN has extended the deadline for BDC operators to access the NFEM for weekly FX purchases. In a circular signed by Dr. W.J. Kanya, the Acting Director of the Trade & Exchange Department at the CBN on Monday, the apex bank announced that the previous deadline of January 31, 2025, has now been extended to May 30, 2025.
This intervention has helped ease pressures in the parallel market, with rates gradually converging with the official exchange rate.
Naijaonpoint earlier reported that the naira closed January 2025 at N1,475/$1 at the NFEM, marking its strongest performance since June 2024.
The Nigerian currency was officially exchanged for N1,473 to a dollar on June 11, 2024, the strongest until January 31, 2025.
This represents a significant gain from its closing rate of N1,535/$1 on December 31, 2024, indicating a N60 gain or a 3.91% increase month-on-month.