Nigeria’s foreign currency reserves have gone up by $591.78 million in the month after the government sold $2.2 billion in Eurobonds on December 2, 2024. The reserves grew from $40.292 billion on December 2 to $40.884 billion by January 3, 2025, representing a month-on-month increase of 1.47%. This illustrates the efficacy of the state’s financial strategies in stabilizing the foreign exchange position of the country within an economic downturn.
According to data from the Central Bank of Nigeria (CBN), the Foreign Exchange (FX) reserves have been consistently rising throughout the month. After the Eurobond auction, the reserves first went up by $84 million in the first week, reaching $40.376 billion by December 9.
The growth sped up in the middle of the month, with reserves jumping to $40.790 billion by December 19, which was a $265 million increase in just one week. By the end of December, the reserves reached their highest point at $40.884 billion, and this amount stayed the same into early January 2025.
Comparing the same time periods shows a big improvement in Nigeria’s foreign exchange situation. On January 3, 2024, the reserves were $33.042 billion, but by January 3, 2025, they had jumped to $40.884 billion—a rise of $7.84 billion or 23.74%. This increase shows that the government’s actions to get foreign funding and take advantage of good global economic conditions have worked well.
The increase in foreign exchange (FX) reserves has many good effects on the economy. More reserves improve Nigeria’s ability to pay its foreign debts and finance imports. They also act as a safety net against global economic problems, like changes in oil prices, which is important because Nigeria depends heavily on oil income. The rise in reserves also boosts trust among investors, helping to keep the naira stable and attract foreign investments.
In December 2024, Nigeria held a successful Eurobond sale, which was an important move to tackle its budget deficit. The proceedings at the auction saw total subscriptions in excess of $9 billion, with allotments made to some $2.2 billion—out of this amount, $700 million at 9.625% for a 6.5-year bond and $1.5 billion for a 10-year bond at 10.375%. Revenue shortages and rising public expenditures are being expected to benefit budget support in 2024.
