Nigeria's Foreign Exchange Reserves Decline by 3.3% Despite CBN's Efforts
- Nigeria’s FX reserves have seen a major decline for the second consecutive month in 2025
- Analysts have expressed concerns over the situation, particularly for an import-dependent country like Nigeria
- There are also suggestions that the latest CBN attempts to stabilise the naira may have something to do with the situation
Legit.ng journalist Ruth Okwumbu-Imafidon has over a decade of experience in business reporting across digital and mainstream media.
Nigeria’s foreign exchange reserves have maintained a downward trend, declining by 3.3% month on month.
The latest data from the Central Bank of Nigeria (CBN) shows that the reserves dropped from $39.72 billion on 31st January to $38.42 billion by 28th February 2025.
This shows a decline of about $1.31 billion within one month, showing major challenges for the country despite the recent naira appreciation and recovery.
Source: UGC
This is a continuation of the decline already seen in January 2025, when foreign reserves went down by $1.16 billion, the SUN reports.
Analysts concerned over decline in foreign reserves
Analysts have expressed concerns over the situation, especially in the face of Nigeria’s huge foreign debt obligations and the import-dependency, which could see even more pressure on the reserves.
The postulations suggest that the CBN may be using the reserves to stabilize the naira and control volatile FX fluctuations, hence the heavy drawdown.
The steep decline appears to have intensified from the 3rd and 4th of February 2025, when the reserves went down by $60 million within 24 hours, hitting a 5-month low.
It continued this drop till the end of February, closing the month at $38.41 billion in foreign reserves.
Why the foreign reserves are dropping
It is now on record that Nigeria’s foreign reserves declined for 33 consecutive days to attain the lowest it had ever been in 2025.
Legit.ng reports that the depletion of the reserves was the longest since November 2022 and took the reserves to the lowest it had been in about five months.
is also partly attributed to the reliance on it for servicing huge debts and other obligations.
With the oil theft and other challenges in the oil and gas sector, revenues from crude oil have declined as well, causing even more complications.
Source: Getty Images
Recall that the naira has been stable in recent months, appreciating steadily to close at N1,496/$ on the Nigerian Autonomous Foreign Exchange Market (NAFEM) by the end of the month.
This stability is credited to CBN's efforts to create a transparent FX market environment and get the official and parallel market rates to align.
Foreign Reserves drop below $40 billion
In related news, data from the CBN have shown that external reserves declined below the $40 billion mark for the first time in 2025.
The new balance comes as the naira improved in value against the dollar in both the official and unofficial exchange markets.
Foreign reserves are crucial in the CBN’s efforts to stabilise the Nigerian currency and maintain momentum in the naira’s improvement.
Proofreading by James, Ojo Adakole, journalist and copy editor at Legit.ng
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