By Chinwendu Obienyi
Nigeria’s gross foreign exchange (FX) reserves experienced a rebound after a nine-week decline, increasing by $12.06 million week-on-week (w/w) to close at $38.36 billion as of March 12, 2025.
The rise comes after a period of sustained depletion, with reserves falling by $1.31 billion in February 2025 alone.
The increase reflects a modest recovery, though the reserves remain under pressure from external debt obligations, forex market interventions, and fluctuating oil revenues.
Although the reserves stood at $38.35 billion as of March 6, 2025, they marked a year-on-year increase of 12.73% compared to the $34.02 billion recorded in 2024.
However, the monthly trend has been mixed, with significant declines in January and February 2025 due to increased forex demand and lower oil earnings.
Furthermore, the naira depreciated by 1.3 per cent at the official market to close at N1,537.50/$1 despite the Central Bank of Nigeria (CBN)’s robust intervention, selling $360 million to authorized dealers, which helped mitigate a steeper devaluation amid the resurgence of demand pressures.
In the forwards market, naira rates decreased across the 1-month (-0.6 per cent to N1,577.80/$1), 3-month (-0.8 per cent to N1,654.10/$1), 6-month (-0.7 per cent to N1,764.98/$1), and 1-year (-0.8 per cent to N1,965.95/$1) contracts.
The Central Bank of Nigeria (CBN) has been actively intervening in the forex market to stabilize the naira, which has contributed to the depletion of reserves.
Looking ahead, the CBN expects reserves to gradually increase in 2025 if oil output expands as projected, but sustaining this growth will depend on continued economic reforms and foreign capital inflows.
Commenting, analysts at Cordros Research said, “Concerns about oil receipts, underpinned by lower oil prices, are likely to temper net FX inflows from FPIs, likely sustaining pressure on the naira.
Nonetheless, CBN’s sustained market intervention and reduced market distortions are expected to prevent a sharp depreciation of the naira.”