Nigeria’s foreign exchange reserves witnessed a significant decline in January 2025, plummeting by $832.62 million between January 6th and 21st, according to data released by the Central Bank of Nigeria (CBN). This sharp drop, the largest since April 2024, has raised concerns about the country’s external liquidity position.
The reserves, which stood at $40.92 billion on January 6th, dwindled to $40.09 billion by January 21st, marking a 2.03% decrease within a short period. This decline comes after a period of relative stability and follows a similar sharp drop observed in April 2024.
Several factors may have contributed to this significant decline, including increased demand for foreign exchange for imports, debt servicing obligations, and potential capital flight.
This decline has raised concerns about the CBN’s ability to effectively intervene in the foreign exchange market to stabilize the naira, which has faced mounting pressure in the past.
Credit: Nairametrics (Text Excluding Headline)
