Nigeria’s foreign reserves declines to $39.72bn in January 2025 – CBN
The nation’s foreign exchange (FX) reserves declined by $1.16 billion in January 2025, wiping out the $592.58 million gain recorded in December 2024.
The latest data from the Central Bank of Nigeria (CBN) show that reserves fell from $40.88 billion at the end of December to $39.72 billion as of January 31, 2025.
A review of the CBN data within the period showed a steady decline, as the reserve declined from $40.88 billion on January 2, 2025 to $40.75 billion on January 10 but depreciated further to $40 billion before closing on January 31, 2025 at $39.72 billion.
The January decline was a result of the CBN’s increased dollar sales to Bureau De Change (BDC) operators as part of efforts to stabilize the naira amid ongoing currency volatility.
The CBN has maintained its strategy to restore confidence in the forex market by ensuring liquidity at the retail segment of the market.
The CBN started dollar sales to BDCs in December, injecting foreign exchange into the retail segment to reduce speculative on the foreign exchange market.
The apex bank had in a circular authorised BDC operators to purchase up to $25,000 weekly in forex from the Nigerian Foreign Exchange Market.
Under the directive, BDCs may purchase forex from a single Authorized Dealer of their choice, provided they fully fund their accounts before accessing the market.
The transactions will occur at the prevailing NFEM rate, and BDCs are required to adhere to a maximum 1 per cent spread when pricing FX for retail end-users.
The arrangement was to be in effect from December 19, 2024, to January 30, 2025.
However, the CBN has extended the deadline for BDC operators to access the NFEM for weekly FX purchases. In a circular signed by Dr. W.J. Kanya, the Acting Director of the Trade & Exchange Department at the CBN on Monday, the apex bank announced that the previous deadline of January 31, 2025, has now been extended to May 30, 2025.
This intervention has helped ease pressures in the parallel market, with rates gradually converging with the official exchange rate.
