Nigeria’s foreign exchange reserves have dropped by 1.2 per cent in the first 19 days of 2025 amid tight liquidity in the FX market.
The gross reserves analysed by THE WHISTLER showed that the figures have dipped by $527.2m amid government efforts to raise forex inflows.
Checks revealed that gross reserves as of January 16, 2025, stood at $40,350,760,199.71, down from the $40,877,997,438.45, which it was as of December 31, 2024.
As of January 16, 2025, Nigeria’s liquid reserves held at the Central Bank were $39.63bn while $715.19m was blocked.
Despite the current decline, the reserves are available to finance 17 months of imports.
Head of Equities Research, Vetiva Capital Management Limited, Victoria Ejugwu, believes the rise in crude oil prices will have a positive impact on the country’s foreign exchange reserves.
She said, “Despite prevailing macroeconomic headwinds, certain sectors are poised for expansion. We anticipate growth in Oil & Gas.”
“The Oil & Gas and Agriculture sectors are expected to benefit from persistently high global commodity prices.”
The rise in oil prices is expected to impact Nigeria’s forex reserves as the country relies on crude oil exports for over 90 per cent of foreign exchange from exports.
Proshare Research also believes that inflows through foreign direct investments would support reserves.
It said Nigeria had received many commitments worth billions of dollars from abroad, adding that the government could make the commitment materials through deliberate policies.
“Nigeria has recorded enormous FDI commitments over the years; however, most of these commitments have not been realised,” analysts at Proshare Research said.
The research firm added, “Transparency and conflict of interest must be checked for this to happen.”
THE WHISTLER can report that in the 2024 full year, reserves grew from $33bn on January 2, 2024, to $40.87bn by December 31, 2024, representing a $7.8bn addition to gross reserves.
In the past year, the Central Bank of Nigeria has made several efforts to boost reserves and save the naira from further depreciation.
In 2024, the CBN activated plans to double foreign-currency remittance flows through formal channels by granting 14 new (IMTOs) Approval-in-Principle (AIP), according to the bank’s acting director of corporate communications, Mrs. Hakama Sidi Ali.
“We are wasting no time driving progress to remove any bottlenecks hindering flows through formal channels permanently. We have a determined pathway and a sequenced approach to tackling all challenges ahead, working hand in hand with key stakeholders in the remittance industry,” she said in a circular.
CBN’s Forex Reserves Drop By $527.2m Amid Liquidity Challenge is first published on The Whistler Newspaper
Source: The Whistler
