The foreign exchange reserves of Nigeria plummeted by $1.31 billion or 3.3 per cent in February 2025 to close the month at $38.42 billion compared with the $39.72 billion quoted on January 31, according to data released by the Central Bank of Nigeria (CBN).
The decline comes as the Naira has shown signs of recovery against major currencies like the Dollar, Euro, and the Pound Sterling in the last month in the different segments of the currency market.
Business Post reports that the local currency has moved between N1,490 per Dollar and N1,550/$1 in the last few weeks.
The month of February saw a steeper decline in reserves compared to January, when they fell by $1.16 billion.
The continuous downward trend raises concerns about Nigeria’s financial stability, particularly in light of its substantial external debt obligations and dependency on imports for critical goods.
Throughout February, Nigeria’s foreign reserves exhibited a consistent decline. They stood at $39.60 billion on February 3, gradually decreasing to $39.54 billion by February 4. This marked the beginning of a robust downward trajectory, ultimately reaching $38.41 billion by February 28.
The slide is the longest since November 2022 and takes reserves to the lowest level since October.
Meanwhile, the Central Bank of Nigeria (CBN) is clearing a backlog of orders to sell Naira for foreign currency and boosting Dollar supply to the country’s Bureaux De Change (BDC) operators.
However, market analysts warn that if the trend goes on, the Naira may face a volatile second quarter that could erase the gains of the first quarter of 2025.