External Reserves fall by $3.5bn in H1-2025

Nigeria’s gross external reserves fell to $37.181 billion, according to latest data update from the Central Bank of Nigeria (CBN) currency platform, following successive outflows for offshore FX obligations. Gross external reserves recorded a significant decline of approximately $3.5 billion in the first half of 2025, dropping from $40.88 billion at the close of December 2024 to $37.37 billion as of June 26, 2025. The FX reserves have consistently trended downward throughout the period, reflecting a mix of FX market pressures and elevated external obligations, analysts at Anchoria Limited said in a mid-year economic report. The external reserves balance eased as the Central Bank maintained aggressive fx intervention, despite pressure on oil export.
Global oil markets experienced significant volatility throughout the period, driven primarily by escalating geopolitical tensions in the Middle East. The conflict between Israel and Iran has created substantial uncertainty, with Brent crude surging nearly 8% during peak tensions as markets priced in the risk of broader regional conflict. Nigerian crude grades benefited from this environment, with Bonny Light and Escravos Light approaching the $80 per barrel mark, while Brass River and Qua Iboe have traded at $77.09 and $77.14, respectively. These price levels represent a significant boost for oil-exporting nations, particularly those like Nigeria that rely heavily on petroleum revenues for government financing, AIICO Capital Limited said in a note. In June alone, the reserves fell by about $1.07 billion in just over three weeks from $38.39 billion on June 2, indicating intensified foreign exchange interventions and potential outflows.
“We observed that while improved foreign portfolio inflows and rising FX supply from non-bank corporates and exporters have offered some support to the naira, the market remains vulnerable”, Anchoria Limited said in the report. Analysts highlighted that the relatively modest inflows from the CBN, alongside the declining reserve buffer, could limit the apex bank’s capacity to absorb demand-side shocks in the FX market. Despite short-term naira stability, sustained external pressures and weaker reserves may constrain future monetary flexibility, especially if global financial conditions tighten further, details from the mid-year report read. Analysts stated that the situation underscores the need for cautious policy navigation and robust external funding strategies in the second half of the year.