Nigeria’s external reserves fall by $1.2bn in June, total YTD decline hits $3.7bn

Nigeria’s gross official reserves dropped by $1.2 billion month-on-month (MoM) to $37.2 billion at the end of June 2025, according to the latest data from the Central Bank of Nigeria (CBN).

The decline underscored persistent pressure on the country’s external buffers, despite a brief reprieve in May, when reserves saw a temporary uptick of $515 million.

Since January 2025, reserves have steadily fallen, reflecting a challenging macroeconomic environment shaped by fragile global oil market conditions, uncertain OPEC+ supply strategies, and weaker global growth.

So far in 2025, Nigeria’s reserves have declined by approximately $3.7 billion, largely due to the CBN’s sustained interventions in the foreign exchange (FX) market and repayments on external debt.

However, recent data from early July point to slight improvements, bolstered by increased foreign portfolio investment (FPI) inflows. According to FMDQ data, FPI inflows rose significantly from just $0.5 million in April to $1.1 billion in May and further to nearly $1.5 billion in June 2025. This was accompanied by a temporary easing of FX demand pressures, as import-related outflows slowed. Still, signs of a rebound in FX demand from importers have started to emerge in recent days.

In terms of import cover, Nigeria’s reserves are sufficient to cover 11.2 months of merchandise imports and 7.7 months when services are included, based on the balance of payments data through December 2024.

In contrast, other African economies are seeing improvements in their external positions. South Africa’s international liquidity rose by $413 million MoM to $65.2 billion in June, supported by a $337 million increase in foreign currency reserves. Egypt also reported growth in net FX reserves, reaching $48.7 billion in June from $48.5 billion in May, helped by strong diaspora remittance inflows.

Despite the pressure on reserves, Nigeria’s currency gained some ground in June. The naira appreciated by 3.5% MoM to close at N1,532.0 per USD at the official window, aided by improved market sentiment and rising investor confidence.

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