Nigeria’s External Reserves Drop $3.5bn in Six Months Despite Naira Stability

Nigeria’s external reserves have declined by $3.51 billion in the first half of 2025, dropping from $40.883 billion at the start of the year to $37.369 billion by June 26, according to the Central Bank of Nigeria (CBN). The reserves had shown a gradual drop through April, briefly increased in May, but resumed a downward trend soon after.

The month of June alone recorded a $1.022 billion or 2.66% decline in reserves, bringing the year-to-date fall to 8.6%. Despite the decline, analysts project a stable naira, buoyed by increased inflow from foreign portfolio investors (FPIs) and stronger forex contributions from exporters and corporates.

Coronation Research analysts noted that while the market remains susceptible to demand-side pressure, continued inflows and CBN’s support measures should help the naira remain steady in the near term. They highlighted ongoing concerns about oil prices and production levels, which significantly influence Nigeria’s forex earnings.

Cordros Research echoed similar sentiments, emphasizing that sustained reform efforts and stable global economic conditions would continue to strengthen investor confidence and liquidity in the forex market. The naira’s resilience is closely tied to the success of these reforms and reserve management by the apex bank.

Amid this backdrop, the naira appreciated slightly, closing at N1,529.71/$ at the official market early this week. It had appreciated 0.5% the previous week due to increased FPI inflows. Forward market rates also showed gains, signaling improved investor outlook across short- and long-term forex contracts.

Source: Leadership