Nigeria's FX reserves rise after nine-week decline

Nigeria's Foreign Exchange reserves have finally seen an increase after nine weeks of decline. The reserves fell steadily since January 2025 due to factors such as decreasing oil prices and intervention efforts by the Central Bank of Nigeria (CBN). Last week, the reserves grew by about $12.06 million, reaching a total of $38.36 billion as of March 12, 2025. In February alone, the reserves dropped over $1.3 billion, alarming financial experts. The recent growth provides some hope for recovery. However, the reserves are under pressure from the government's foreign debt obligations and declining oil revenues. The CBN's interventions in the foreign exchange market have contributed to the strain on the FX reserves. Although these efforts briefly improved the naira's value against the dollar, the naira still depreciated by 1.3%, closing at N1,537.50 per dollar. Year on year, FX reserves showed a 12.73% increase from $34.02 billion in March 2024. Yet, 2025 has brought challenges due to higher demand for foreign exchange and reduced oil earnings. Experts believe the CBN's actions will prevent a significant drop in the naira's value. Overall, analysts predict continued pressure on the naira due to concerns about oil receipts and lower foreign exchange inflows. The situation remains critical for Nigeria, an import-dependent nation that heavily relies on its FX reserves.