The Central Bank of Nigeria has disclosed that Nigeria’s foreign reserves have decreased to $38.88 billion as of Monday, February 17, 2025.
This latest figure is $2.2 billion when compared to the $40.88 billion the reserves stood at at the beginning of January 2024.
The current balance is the first time that Nigeria’s reserves fell below $39 billion in 2025 amid moves by the CBN to clear forex obligations to avoid pressure on the naira.
TimesNow.com.ng reported that Olayemi Cardoso, the CBN governor said plans are on the way to commence final settlements of the outstanding amount from the $7 billion foreign exchange obligation backlog.
His words:
Nigeria’s foreign reserves have been rising steadily since President Bola Tinubu’s administration ceased paying fuel subsidy, which led to an increase in fuel prices.
Foreign exchange inflows are likely driven by higher oil export revenues, external borrowing, and increased investor confidence in Nigeria’s financial markets.
There are expectations that the FX reserves will decline further as CBN moves to clear forex obligations.
Foreign reserves growth is important because it acts as a safety net for a country’s economy, allowing it to stand against currency fluctuations, sudden capital outflows, or economic crises by providing readily available funds to intervene in the foreign exchange market and stabilise the domestic currency.
Some of the reasons FX reserves growth is important include:
TimesNow.com.ng reported that over the past month, the exchange rate for the naira against the US dollar has been positive.
For example, in the black market, the naira’s value has improved by over N100, and the dollar is now below N1,600.
It is the same scenario for the naira against the euro and British pound sterling in the official market.
Proofreading by Nkem Ikeke, journalist and copy editor at TimesNow.com.ng.
Source: TimesNow.com.ng
