….Projected to Fall to $47 Billion
….CBN Vows to Raise Reserves to $51Bn
By NIyi Jacobs
Nigeria’s economy is facing renewed pressure as its foreign reserves continue to decline, moving closer to the projected $47 billion level. The reserves, which serve as the country’s “dollar buffer” for trade, debt payments, and currency stability, have been steadily falling in recent weeks after reaching a decade high earlier in the year.
BusinessNG gathered that at its peak in February, Nigeria’s reserves stood at about $50.45 billion, the strongest level in more than ten years.
However, since March, the trend has shifted downward, with the reserves dropping almost daily. The latest figures now place them at around $48.6 billion.
The decline is being driven by a combination of factors. One major reason is the Central Bank of Nigeria’s ongoing intervention in the foreign exchange market. The bank has been selling dollars to support the naira and reduce volatility, but this naturally reduces the reserve stock.
Another factor is Nigeria’s regular debt obligations. The country continues to make external loan repayments, which are usually settled in dollars, further drawing down the reserves. At the same time, inflows from foreign investors have slowed, as global uncertainty—including geopolitical tensions such as the Middle East conflict—has made investors more cautious about emerging markets.
With these pressures combined, some analysts, including Fitch Ratings, expect reserves could slide further to about $47 billion by the end of the year. However, the Central Bank of Nigeria has projected a more optimistic outlook, suggesting reserves could recover to around $51 billion if conditions improve.
This difference in projections highlights the uncertainty surrounding Nigeria’s external position. The outcome will largely depend on oil earnings, foreign investment inflows, and how aggressively the Central Bank continues to support the naira.
For now, the steady decline in reserves signals a tightening financial environment. While the levels are still considered adequate, continued pressure could limit policy flexibility and increase sensitivity to global economic shocks
