Reserves Decline By $1.16bn As Naira Firms

The value of naira continued to appreciate at both the official and parallel ends of the market as the 30-days moving average of the external reserves declined by $1.16 billion in the month of January.

From $40.883 billion which it was at the beginning of the year, the external reserves of the country stood at $39.723 billion as at January 31 according to latest data by the Central Bank of Nigeria (CBN).

The depletion of the reserves analysts attributed to the interventions of the apex bank in an effort to ease demand pressure at the foreign exchange market.

The CBN had on Monday said it will continue to supply foreign exchange to BDCs selling $25,000 to eligible BDCs weekly. This is asides its interventions at the Nigeria Autonomous Foreign Exchange Market (NAFEM).

With its interventions, the value of the naira had continued to firm as it closed at the official window at N1,498.95 to the dollar while at the parallel market, it closed stronger at N1,605 to the dollar.

As against the January 31, 2025 set as the deadline for the sale of foreign exchange to BDCs the CBN had in the circular signed acting Director Trade and Exchange, Dr W.J. Kanya, shifted the deadline by an additional four months.

By the new circular, the CBn is expected to continue to supply foreign exchange to BDCs every week up until May 30, 2025. Commenting on the extension, President of the Association of Bureau de Change Operators of Nigeria (ABCON), Aminu Gwadabe commended the policy.

He noted that ABCON and its members received the news of the extension as a “good development and we considered it as a part of the CBN efforts at ensuring the continuity and its determination for the inclusiveness of our sub sector in the EFEM Market.

“We however, call on all Money deposit banks to partner with the CBN and our members in the implementation of this circular to ensure liquidity in the retail end sector and the naira ongoing stability.

“We observed with grace dismay their circumspection in the earlier directives.

On behalf of my members I sincerely thank the CBN management for their flexibility and transformative leadership and assured them of keeping our potent third leg mechanism role in eliminating volatility and a wider gap between the parallel market and the EFEM market.”