Nigeria’s FX reserves drop by $434m in one week
Nigeria's foreign exchange reserves fell by $435.40 million in a week, according to Central Bank of Nigeria data.The reserves declined from $40.92 billion on January 6 to $40.48 billion on January 14.
This drop reflects a significant change in the country's foreign reserve holdings over a short period of time.
The data show a consistent decline in Nigeria's foreign exchange reserves over the course of the week.
Beginning with $40.92 billion on January 6, the reserves gradually decreased to $40.91 billion on January 7, $40.85 billion on January 8, and $40.80 billion on January 9.
The downward trend continued, with reserves falling to $40.75 billion on January 10, then $40.56 billion on January 13, and finally $40.48 billion on January 14.
This consistent decrease represents a $435.40 million reduction in the country's foreign reserves over this time period.
According to Charles Abuede, research lead at Cowry Asset Management Limited, the gradual depletion of Nigeria's foreign exchange (FX) reserves may be due to a halt in FX inflows.
This lack of sufficient inflows may have put pressure on the reserves, contributing to the consistent decline observed this week.
He added, "This could also be an attempt by the CBN to defend the naira in the market in order to maintain its value.
"The Nigerian government's revenues have remained weak over the years, while expenditure has increased, resulting in a negative fiscal balance.
"To increase reserves, Nigeria must improve and sustain crude oil production and sales in order to generate more revenue.
"Incentives to spur diaspora remittance inflows, coherent FX policy reforms aimed at creating balance in the FX market and to drive FDI inflows."
On December 18, 2024, the CBN announced that it had granted qualified bureau de change operators temporary access to the Nigerian Autonomous Foreign Exchange Market.
This access enabled them to spend $25,000 per week from December 19 to January 30.
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