December 22, (THEWILL) — Nigeria’s foreign exchange (FX) reserves have declined by $263 million, bringing to an end a 25-week streak of steady accretion, according to the latest official data.
The decline marks the first weekly drawdown after several months of sustained reserve build-up, a period largely supported by improved foreign inflows, easing demand pressures in the FX market, and ongoing policy reforms.
Analysts link the latest fall to a mix of increased FX interventions to support the naira, external debt service obligations, and seasonal demand for foreign currency.
Despite the setback, market observers note that reserve levels remain relatively strong compared with earlier periods, providing a buffer against near-term external shocks.
The prolonged accretion phase had helped bolster market confidence and moderate volatility in the FX market.
However, the latest data underscores the fragility of reserve accumulation, given Nigeria’s structural challenges, including heavy dependence on oil revenues and exposure to shifts in global financial conditions.
Analysts say sustained reserve growth will hinge on consistent FX inflows from oil exports, diaspora remittances, and foreign investment, alongside continued reforms to deepen transparency and liquidity in the FX market.
While the single-week decline may trigger short-term concerns, economists caution against overreaction, stressing that it does not yet signal a reversal of broader stabilisation efforts and urging policymakers to maintain discipline in FX management.
Ogochukwu Onwaeze
