External Reserves Decline $3.5bn In 6 Months

The 30 days moving average of Nigeria’s external reserves has declined by $3.51 billion in the first six months of this year standing at $37.369 billion as at June 26, 2025 according to data provided by the Central Bank of Nigeria (CBN).

The gross external reserves which was at $40.883 billion at the beginning of the year had gradually declined to $37.933 billion at the end of April before reaching $38.561 billion on May 22 when it began another decline streak.

This is a 8.6 per cent year to date decline and a 2.66 per cent or $1.022 billion decline in the month of June, 2025. Despite this, analysts say they expect the value of the naira to remain stable with the continued supply of foreign exchange inflow from foreign portfolio investors.

According to analysts at Coronation Research, 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.

“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. There is also some concern on oil prices 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’s ongoing intervention strategy,” they added.

Similarly, analysts at Cordros Research in an emailed note said “we expect the continued reform efforts to strengthen investor sentiment and sustain foreign inflows, enhancing forex market liquidity. Should global pressures remain contained, the naira is expected to remain relatively stable in the short term.

Crude oil prices had fallen sharply last week as geopolitical tensions in the Middle East eased, with Israel and Iran halting hostilities. Brent slid below $68 per barrel and WTI dropped to $65.55 per barrel, down from $77 per barrel and $73 per barrel respectively at as the preceding week close.

Meanwhile the value of the naira continued to appreciate as it closed the first day of the week at N1,529.71 to the dollar at the official end of the market. Last week it had appreciated by 0.5 per cent to N1,541 to the dollar, driven by increased supply from FPIs.

In the forwards market, the naira rates appreciated across the 1-month (-0.2% to N1,583.39/USD), 3-month (-1.0% to N1,654.10/USD), 6-month (-2.0% to N1,759.14/USD) and 1-year (-2.6% to N1,955.18/USD) contracts.