Nigeria’s foreign reserves plunge $3bn to six-month low

BY TEMITOPE ADEBAYO

Nigeria’s foreign exchange reserves have dropped by $3 billion, sliding to their lowest level in six months as the Central Bank of Nigeria intensified interventions to stabilise the naira amidst waning FX inflows and renewed pressure from foreign investors.

Latest data from the CBN showed reserves fell below $37.88 billion, with the net FX position now standing at $23 billion — a level that signals only 40 per cent of the total reserves remain available for claims.

The decline is tied to sluggish oil output and unstable global crude prices, which have strained government earnings and deepened fiscal pressures.

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Analysts also linked the slump to offshore investors retreating from Naira assets following a wave of risk aversion, despite the CBN’s earlier efforts to attract inflows with elevated Treasury and OMO bill yields.

Market sentiment has shifted sharply as the CBN reduced OMO auction activity to curb balance sheet costs, fuelling fresh pressure on the foreign exchange market. With crude oil prices now trading below $70 per barrel and global dollar flows tightening, Nigeria’s fiscal and external positions face growing strain in the months ahead.