Nigeria’s foreign reserves declined by $1.31 billion to $38.42 billion in February as the naira continued to appreciate against the dollar.
Data from the Central Bank of Nigeria (CBN) showed that the reserves dropped by 3.3% from $39.72 billion recorded at the end of January 2025.
The decline in February surpassed the $1.16 billion reduction seen in January and reflects the ongoing pressures on the country’s foreign reserves amid efforts to stabilize the naira.
The local currency has appreciated from around N1,620 to N1,500 in recent weeks.
CBN Governor Yemi Cardoso explained that ensuring the naira’s stability remains a higher priority than its exchange rate against the dollar. He attributed the gains to recent measures aimed at enhancing transparency in the foreign exchange market.
“Our ability to close those gaps and ensure a more open and transparent system has been crucial,” Cardoso stated.
According to the CBN, a series of factors has led to the improving in the naira value and the overall economy.
The introduction of the be-matching system helped improve transparency in forex transactions and reduced the exchange rate differential between the official market and Bureau De Change operators to less than 1%.
The move is part of broader efforts to stabilize the naira and restore investor confidence.
Despite the positive sentiment surrounding the naira’s appreciation, the sustained decline in foreign reserves has raised concerns about the country’s ability to manage external obligations and maintain exchange rate stability in the medium term.
Analysts warn that further erosion of reserves could limit the CBN’s ability to intervene effectively in the forex market, especially with rising import demands and debt servicing obligations.
As the CBN continues to balance naira stability with preserving foreign reserves, stakeholders are closely monitoring developments in the forex market and the impact of ongoing reforms on Nigeria’s external sector.
