Nigeria’s foreign exchange (FX) reserves have recorded the first decline in 25 weeks, falling by $263.151 million (equivalent of N381.569 billion) to $45.21 billion as of December 17, 2025, according to new data from the Central Bank of Nigeria (CBN).
The drop, which followed three consecutive days of outflows between December 15 and 17, marks a reversal of a long-running accumulation trend that pushed reserves to their highest level in six years.
The contraction ended a sustained build-up that had peaked at $45.472 billion on December 12.
By December 17, reserves had slipped to $45.209 billion, signalling renewed pressures on Nigeria’s external position.
What the data show
The decline comes despite strong growth earlier in the year. CBN data shows that Nigeria’s gross official reserves rose by $1.5 billion month-on-month to $44.7 billion at end-November 2025.
Over the 11 months to November, reserves gained $3.8 billion, and by $7.5 billion since June, when they were at their year-to-date lows. A key driver was the $2.4 billion Eurobond issuance in November, part of which refinanced a $1.2 billion Eurobond maturity.
Nigeria’s reserves remained robust before the December decline, providing 13.9 months of merchandise import cover and 9.4 months when services were included, according to the balance of payments to March 2025.
Drivers: Slowing inflows, high demand, and heavy repayments
FX inflows plunged by 67% month-on-month to $2.0 billion in November, the lowest since July 2024. Foreign portfolio inflows fell sharply to $593 million from $3.5 billion, while FDI collapsed to $10.4 million from $221 million, heightening pressure on the naira. Analysts blamed the reversals on the controversial Capital Gains Tax (CGT).
In addition, the CBN also settled multiple obligations between Dec. 15–18, including primary market repayments of:
- N9.103 billion
- N22.327 billion
- N70.857 billion in; and
- N537.750 billion in matured OMO repayments on Dec. 16, totaling N640.037 billion in debt repayments, possibly drawn from the buffers.
At the same time, the CBN conducted fresh OMO sales of N408 billion and N916.200 billion on December 11, totalling N1.324 trillion, which could have offset the debt repayments.
Seasonal Dollar Demand
As in previous years, holiday travel, import settlements, and retail stockpiling intensified FX demand. Despite stronger reserves in November, the naira still weakened modestly as these pressures built.
Nevertheless, Nigeria’s reserve buffers remain significantly higher than the $40.19 billion recorded at end-2024 and $33.22 billion in 2023. Yet the timing of the decline underscores lingering fragility, especially as FX demand rises and global financial conditions tighten.
The reserves continue to provide strong import cover, but analysts warn that any prolonged period of subdued inflows or heavier repayments could weaken the naira stability profile.
Outlook: Festive pressures, remittance cushion ahead
FBNQuest expects further festive season pressures on the naira, alongside potential upticks in inflation driven by import-led consumer spending. With the naira trading around N1,455/$ in late 2025, analysts say year-end demand could worsen short-term volatility.
However, stronger reserves, diaspora remittances, and recent Eurobond inflows are expected to cushion the currency and help the CBN manage liquidity.
Market sentiment may remain cautious, with possible short-term selloffs across equities and a tighter financial environment as FX demand peaks in early 2026.
