The Central Bank of Nigeria has revealed that Nigeria’s external reserves increased to $40.81 billion as of Friday, December 12, 2024.

This latest figure represents a $524.07 million increase in just 20 days compared to the $40.29 billion the reserves stood at at the beginning of December 2024.

The last time Nigeria's external reserves rose to the current level was December 9, 2021.

Breakdown of reserves’ growth

CBN data shows Nigeria's reserves have been over $40 billion since November 9, 2024.

Here is a monthly balance of Nigeria's reserves in 2024

1. January: $33.35bn

2. February: $33.72bn

3. March: $34.26bn

4. April: $32.25bn

5. May: $32.69bn

6. June: $34.19bn

7. July: $36.80bn

8. August: $36.83bn

9. September: $36.31bn

10. October: $39.79bn

11. November: $40.23bn

12. December(20th): $40.82bn

Sources of inflows

Nigeria's foreign reserves have been rising steadily since President Bola Tinubu's administration ceased paying fuel subsidy, which led to an increase in fuel prices.

The growth in reserves during the month reflects a significant improvement in foreign exchange inflows, likely driven by higher oil export revenues, external borrowing, and increased investor confidence in Nigeria's financial markets.

Why is external reserves growth important

Foreign reserves growth is important because it acts as a safety net for a country's economy, allowing it to stand against currency fluctuations, sudden capital outflows, or economic crises by providing readily available funds to intervene in the foreign exchange market and stabilise the domestic currency.

Some of the reasons FX reserves growth is important include:

1. The CBN use it to manage exchange rate stability

2. It is also used to pay external debt

3. It is also used to support importation like the RDAs