Foreign Reserves Surge 12.73% YoY to $38.35bn Despite Volatility
CHIGOZIE AMADI
Nigeria’s foreign reserves rose by $4.33 billion year-on-year (YoY) to $38.35 billion as of March 6, 2025, reflecting a 12.73 per cent increase from the $34.02 billion recorded in the comparable period of 2024.
This is according to data obtained from the Central Bank of Nigeria (CBN), which highlights a steady accumulation of reserves amid ongoing economic reforms and foreign exchange policy adjustments by the Central Bank of Nigeria (CBN). The growth underscores improved foreign capital inflows, enhanced export earnings, and a relatively stable oil revenue environment over the past year.
Despite the year-on-year growth, monthly reserve movements have shown mixed trends, reflecting broader macro-economic conditions and shifted in capital flows.
Between November and December 2024, reserves recorded increases of $446.94 million and $645.53 million, respectively, reflecting improved forex inflows driven by higher oil receipts, foreign investment inflows, and seasonal remittances ahead of the festive period. The reserve increase during this period coincided with a more stable exchange rate environment and policy measures aimed at curbing speculative forex demand.
However, the trend reversed in early 2025, with January posting a sharp decline of $1.15 billion. This drop was attributed to a combination of factors, including increased forex demand from importers, external debt service obligations, and portfolio outflows as investors reassessed their exposure to emerging markets.
The downward trend continued in February. The persistent decline was linked to lower oil earnings due to price fluctuations in the global market, sustained capital flight, and heightened demand pressures on the naira amid inflationary concerns.
As of March 6, 2025, reserves stood at $38.35 billion, reflecting a marginal decrease of $67.57 million compared to the previous month.
Commenting on the reserves at the recent monetary policy committee meeting, the Governor of Central Bank Olayemi Cardoso said: “The external reserves remained robust at $39.4 billion as of 14th February 2025, translating to an import cover of 9.6 months for goods and services. In addition to this, the Balance of Payments has remained strong with a positive current account balance of $6.06 billion as at the end of the third quarter of 2024.”
