Nigeria’s External Reserves Drop by $1.16bn as Naira stands

Abuja, Nigeria  —  Nigeria’s external reserves declined by $1.16 billion in January, even as the naira continued its upward trajectory across both official and parallel markets.

According to the latest figures from the Central Bank of Nigeria (CBN), the country’s external reserves fell from $40.883 billion at the start of the year to $39.723 billion as of January 31. Analysts attribute this decline to the apex bank’s sustained intervention in the foreign exchange (FX) market to ease demand pressures.

The CBN reaffirmed its commitment to stabilizing the market, stating that it would continue supplying $25,000 weekly to eligible Bureau de Change (BDC) operators alongside its interventions in the Nigeria Autonomous Foreign Exchange Market (NAFEM).

These measures have contributed to the naira’s appreciation, with the currency closing at N1,498.95 per dollar in the official market, while trading at N1,605 per dollar in the parallel market.

Meanwhile, in a circular signed by Acting Director of Trade and Exchange, Dr. W.J. Kanya, the CBN announced an extension of the deadline for BDC FX sales from January 31 to May 30, 2025.

Reacting to the development, President of the Association of Bureau de Change Operators of Nigeria (ABCON), Aminu Gwadabe, welcomed the extension, describing it as a positive step toward sustaining liquidity and inclusivity in the FX market.

“We commend the CBN for its flexibility and commitment to ensuring stability,” Gwadabe stated. “We urge deposit money banks to collaborate with the CBN and BDCs to maintain liquidity in the retail FX sector and further strengthen the naira.”

He also emphasized ABCON’s commitment to playing its role in reducing market volatility and narrowing the gap between official and parallel exchange rates.

The statement concluded with a renewed commitment by ABCON and its members to work closely with the CBN in fostering a more stable and transparent FX market.

By Enoch Odesola |February 5, 2025