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At the end of 2023, global foreign exchange reserves reached $12.3 trillion, marking a 3.5% year-on-year increase from $11.92 trillion the previous year, according to the latest data from the IMF’s Currency Composition of Official Foreign Exchange Reserves (COFER).
However, Nigeria’s forex reserves stood at $32.3 billion, representing a mere 0.26% of the global total—a decline from 0.30% at the end of 2022. The decrease is attributed to reduced forex inflows and increased outflows, down from $36 billion at the end of 2022. On a quarter-on-quarter basis, Nigeria’s share of global forex reserves also fell, standing at 0.28% at the end of Q3 2023, with reserves at $33.32 billion. Globally, there was a 4.2% increase in forex reserves from Q3 2023, which totaled $11.85 trillion.
In terms of currency composition, the U.S. dollar’s share of global forex reserves in Q4 2023 was $6.687 trillion, representing 54.22%. This is nearly identical to its 54.21% share in Q4 2022, though it reflects a significant decline from 59% in Q4 2020 and 71% in 1999. The Euro held $2.29 trillion, or 18.55%, a slight year-on-year increase from $2.25 trillion in Q4 2022. However, its share decreased marginally from 18.9% to 18.55% over the same period. Since 1999, the Euro’s share has remained relatively stable around the 20% mark.
The Pound Sterling and Japanese Yen each maintained a steady presence in global reserves, with shares of 4.5% and 5% respectively in Q4 2023. These shares have remained consistent around the 5% region since 1999. The IMF attributes changes in global forex reserves composition to the rising share of non-traditional reserve currencies. By Q4 2023, currencies like the Chinese Renminbi, Canadian Dollar, Australian Dollar, and Swiss Francs comprised 10.3% of global reserves, up from 9.9% in Q4 2022 and 9% in Q4 2020.
Controversy continues over the precise composition of Nigeria’s forex reserves, with reports suggesting significant portions are tied to the Chinese Renminbi and gold reserves.
