Nigeria’s Foreign Exchange Reserves Slip by $359.81 Million in a Week

Nigeria’s foreign exchange (FX) reserves have taken a notable hit, losing $359.81 million in just one week. As of January 13, 2025, the reserves stood at $40.56 billion, marking a sharp decline from the $40.91 billion peak recorded on January 7, 2025.

This drop underscores a concerning downward trend, with implications for the country’s economic stability and investor confidence.

At the close of 2024, Nigeria’s FX reserves were relatively stable, ending the year at $40.88 billion. Early 2025 brought a glimmer of optimism as reserves edged up to $40.92 billion on January 6. However, this brief upswing proved unsustainable, as reserves began to dip the very next day, sliding to $40.91 billion on January 7.

From January 8 onward, the decline accelerated. On that day, reserves dropped to $40.85 billion—a daily loss of $60.31 million. The downward trajectory continued on January 9, with reserves falling to $40.80 billion, shedding another $49.15 million.

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The pace of depletion intensified on January 10, as reserves slid to $40.75 billion, losing $50.35 million in a single day. The most significant losses occurred between January 10 and January 13, when reserves plunged by $192.39 million over just three days, settling at $40.56 billion.

Overall, Nigeria’s FX reserves declined by 0.88% between January 7 and January 13, raising questions about the factors driving this erosion. While the Central Bank of Nigeria (CBN) has not provided detailed explanations, such trends often reflect pressures from external debt servicing, fluctuating oil revenues, or increased demand for foreign exchange to support imports.

Foreign exchange reserves are a vital economic buffer, helping to stabilize the naira, reassure investors, and manage external shocks.

The recent depletion highlights the fragility of Nigeria’s economic position as it navigates global and domestic challenges. Sustained losses at this rate could have significant consequences for currency stability, inflation, and overall economic confidence.

As Nigeria grapples with these challenges, the government and monetary authorities face growing pressure to implement policies that curb reserve depletion and ensure sustainable economic growth. Whether through boosting export revenues, attracting foreign investments, or reducing dependency on imported goods, a strategic approach is critical to reversing this troubling trend.