Nigeria’s foreign exchange reserves have depleted by $1.38billion since this year, reaching $39.497billion as at February 5.
The reserves currently stand at a level last seen on October 25, 2024 when the reserves were at $39.440billion.
The nation’s foreign reserves had closed year 2024 at $40.877billion, according to Central Bank of Nigeria (CBN) data.
“We observe a weak organic contribution of oil exports to reserve build-up, as much of the build-up in reserves can be traced to multilateral inflows, external debt issuances and foreign portfolio interests,” said Ibukun Omoyeni, SSA economist at Lagos-based Vetiva Research in their 2025 Macroeconomic Outlook, titled “Little room for surprises”.
In 2024, Nigeria raised $3.8 billion in debt– a $900 million domestic bond, a $2.2 billion Eurobond and $750 million out of a $2.2 billion World Bank loan package.
While Nigeria’s gross foreign currency assets are depleting as shown by the CBN in the movement of reserves, the domestic currency has continued to strengthen.
“Looking ahead, Nigeria faces some notable debt obligations. Aside from 2026, the country has Eurobond maturities averaging $1.33 billion annually over the next decade. Including coupon payments, total annual debt servicing costs could average $2.24 billion.
“These maturities suggest that debt repayment and servicing costs are likely to remain high in the near to medium term,” said CardinalStone Research analysts in their 2025 outlook.
When Fitch Ratings in November 2024 affirmed Nigeria’s long-term Foreign-Currency Issuer Default Rating (IDR) at ‘B-‘ with a Positive Outlook, it said the rating was “constrained by weak governance indicators relative to peers, high hydrocarbon dependence, weak net foreign-exchange (FX) reserves, high inflation, ongoing security challenges, and structurally low, albeit improving, non-oil revenue”.
N1,570, marking a 0.95 percent gain against N1,585 quoted on Wednesday in the black market. Street trader who gave his name as Mohammed said there was low activity in the market due to low demand for the dollar. “We have enough dollars but the demand is low,” Mohammed said.
On Wednesday, the apex bank issued new directives, which allows authorised dealers to sell foreign exchange cash to BDCs subject to a maximum of $25,000 to a BDC per week. The new regulation aims to enhance tracking, transparency, and anti-money laundering efforts in the foreign exchange market operated by BDCs.
The CBN said foreign exchange cash purchased by BDCs from authorised dealer banks shall be sold to foreign exchange end-users at a rate not exceeding 1 percent margin above the buying rate.
— BusinessDay
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