Kehinde Fajobi
Nigeria’s foreign exchange reserves fell by $435.40 million in one week, dropping from $40.92 billion on January 6 to $40.48 billion on January 14, according to data from the Central Bank of Nigeria (CBN).
The reserves declined consistently, with records showing $40.91 billion on January 7, $40.85 billion on January 8, $40.80 billion on January 9, and $40.75 billion on January 10.
The downward trend continued to $40.56 billion on January 13 and $40.48 billion on January 14.
The drop comes amid the CBN’s efforts to stabilise the naira and increase liquidity in the FX market.
Charles Abuede, research lead at Cowry Asset Management Limited, attributed the depletion to reduced FX inflows into Nigeria.
“This could also be an effort of the CBN to defend the naira at the market in a bid to shore up its value,” Abuede said.
He noted that weak government revenues and rising expenditures have kept Nigeria in a negative fiscal balance.
“To bring about a rise in the reserves levels, Nigeria needs to improve and sustain crude oil production and sales for more earnings,” he added.
Abuede also highlighted the need for incentives to boost diaspora remittance inflows, coherent FX policy reforms, and measures to attract foreign direct investment (FDI).
He expressed optimism that the CBN’s intensified efforts “could bring some level of calm on the naira and we will see upward movement in the reserves.”
In December 2024, the CBN granted eligible bureau de change (BDC) operators temporary access to the Nigerian Autonomous Foreign Exchange Market (NAFEM), allowing them to purchase $25,000 weekly from December 19 to January 30 to meet retail market demand.