Nigeria’s foreign exchange reserves recorded a significant reduction within two weeks by $832.62m between January 6 and January 21.
According to latest data obtained from Central Bank of Nigeria’s official website, this marked the sharpest fall in reserves since April 2024.
Analysts have expressed concerns over the nation’s external liquidity position given the mounting economic pressures.
The CBN data showed that Nigeria’s gross external reserves stood at $40.92bn as of January 6, 2025.
The reserves had plunged to $40.09bn, by January 21, reflecting a 2.03 per cent decrease over the two weeks.
This drop follows about five months of relative stability and growth in the country’s foreign exchange reserves.
The current levels, now at a two-month low, suggest the possibility of the reserves falling below $40bn by the end of January if the downward trend continues.
Further analysis revealed that the reserves experienced a consistent decline throughout the period.
On January 13, the reserves dropped below $40.6bn for the first time in the month, reaching $40.56bn.
By January 15, the reserves had further declined to $40.42bn, before settling at $40.09bn on January 21.
The declines included a loss of $167.1m between January 10 and January 13, a $502.5m drop between January 6 and January 13, and a cumulative reduction of $832.62m over the two weeks under review.
The decline has drawn comparisons to the significant drop recorded in April 2024, when reserves plunged by $2.16bn within 29 days.
At the time, the CBN governor, Yemi Cardoso, attributed the decline to debt servicing and other financial obligations rather than interventions to stabilise the Naira.
Similarly, the current drop is likely driven by heightened demand for foreign exchange to finance imports, external debt repayments, and capital flight, all of which continue to place pressure on the country’s reserves.
The depletion in reserves may further constrain the CBN’s ability to intervene in the foreign exchange market, potentially heightening the pressure on the Naira.