Nigeria’s FX Reserves Depreciate by $1.19 Billion Amid CBN’s Move to Defend Naira, Service Debts
- Nigeria’s external reserves have depreciated by over $1 billion as the CBN battles to stabilise the naira and service Nigeria’s debts
- The reserves stood at $40.977 billion as of December 2024 but declined to $40.92 billion by January 6, 2025
- The $1.19 billion happened over three weeks after hitting a three-year high in January 2025
Don't miss out! Join Legit.ng's Sports News channel on WhatsApp now!
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
Nigeria’s FX reserves have declined by about $1.19 billion in three weeks amid moves by the Central Bank of Nigeria (CBN) to stabilise the naira.
Data from the CBN shows that the gross FX reserves hit a high of $40.92 billion as of January 6, 2025, from $40.977 billion in December 2024.
Source: Getty Images
Experts predict further reserve depreciation
The reserves began to moderate from $40.56 billion as of January 13, 2025, to $39.723 billion as of January 31, 2025.
The decline was revealed as CBN had not published the external reserves’ position in February.
However, Financial Derivatives Company (FDC) disclosed in its outlook report that Nigeria’s gross external reserves would drop by 11.47% in 2025 to $36.21 billion in 2025 and $37.65 billion in 2026 from a high of $40.9 billion in 2024.
The company’s analysts also expect the exchange rate to average N1,586 in 2025 from N1,615 in 2024.
The naira hits an 8-month high
A previous report by Legit.ng disclosed that the naira hit an eight-month high of N1,747.78 per dollar in the official window as dollar demand dropped following a series of monetary policies introduced by the CBN.
In the parallel market, the local currency rose in value to trade at N1,595 from N1,599.33 due to reduced demand for the US greenback and various CBN policies.
One of the policies is the extension of the deadline for Bureau de Change operators to access forex at the Nigerian Foreign Exchange Market (NFEM) until May 2025.
Nigeria dashed back into the international debt market after two years, issuing $2.20 billion in Eurobonds. The bonds were split into tranches of $700 million maturing in 2031 and $1.50 billion maturing in 2034.
According to reports, the bonds were oversubscribed by $9 billion following renewed investor confidence in Nigeria’s economy.
Nigeria’s debt servicing rises
Experts have attributed the reserves decline to international debt servicing obligations and FX interventions by the apex bank
According to a report by BusinessDay, Nigeria’s debt service reached $3.6 billion in the first nine months of 2024, marking a 39.8% increase and $1.02 billion higher than the $2.6 billion recorded in the same period of 2023.
The apex bank introduced a raft of policies to stabilise the local currency, including launching the FX Code to improve liquidity and transparency.
The bank anchored the Code on six major pillars, warning banks and other forex dealers of severe consequences if they violated it.
CBN slashes Customs FX rates for cargo clearance
Legit.ng earlier reported that CBN has adjusted the Customs foreign exchange rate for cargo clearance in Nigeria’s sea and airports.
The apex bank crashed the rate to N1,477.75 per dollar, down from N1,500 last week.
Legit.ng previously reported that CBN crashed the rates three times last week following the naira’s bullish run in the forex markets.
PAY ATTENTION: Сheck out news that is picked exactly for YOU ➡️ find the “Recommended for you” block on the home page and enjoy!
Source: Legit.ng
