The nation’s gross external reserves declined by $1.07 billion in June, falling from $38.448 billion as of May 31 to $37.369 billion on June 26, according to new data released by the Central Bank of Nigeria (CBN).
The latest decline marks a continued downward trend since June 2, when reserves stood at $38.391 billion.
The reserves, which had closed 2024 at $40.877 billion, have now lost over $3.5 billion in six months, reflecting persistent pressures on Nigeria’s foreign exchange (forex) position despite CBN’s recent measures to bolster dollar liquidity and sustain naira stability.
Coronation Research, in its June 30 market update, noted that Nigeria’s reserves fell by $293.87 million (0.78 per cent week-on-week) last week alone.
“We expect the naira to remain relatively stable in the near term, supported by continued foreign portfolio inflows and improved Forex supply from non-bank corporates and exporters,” Coronation analysts said
“However, the moderate decline in gross external reserves and the relatively modest Forex inflow from the CBN suggest that the market may remain sensitive to demand-side pressures.”
It also said that there is also some concerns on oil process and production numbers and their effect of forex inflow from oil sales , sustained investor interest in fixed income assets , if maintained could help anchor sentiment, though further stability will hinge on the pace of reserve accretion and the Central Bank on going intervention strategy.
United Capital analysts echoed similar sentiments, citing that although Forex inflows from remittances may support the naira, structural weaknesses such as debt servicing, speculative hoarding, and insufficient Forex supply will likely weigh on the local currency.
In response to the forex and reserves situation, CBN Governor Olayemi Cardoso had earlier reaffirmed the bank’s commitment to bolstering Nigeria’s external buffer through reforms targeted at improving exports, easing remittance inflows, and reducing dependence on imports.
“Our foreign exchange reserves have now risen to over $38 billion, giving us close to 10 months of import coverage,” Cardoso had said earlier this month, before it declined in June.
“This provides the country with a more robust buffer to withstand external shocks such as falling oil prices or global market volatility.”
The CBN’s Forex strategy includes promoting backwards integration, simplifying diaspora remittance flows, and working with multinationals such as Airtel Africa to attract long-term investment inflows.