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CBN’s Currency Swap Hits $12bn Amid Weak Reserves

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Fitch Ratings has estimated the Central Bank of Nigeria’s currency swaps with domestic banks to be between $10bn and $12bn as of the end of 2022.

It stated that this was 30 per cent of the country’s gross reserves (at $37bn as of 2022’s end), and comprised swaps with domestic banks, and others.

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According to the international rating agency, this suggested that the country’s net reserve position may be weaker than anticipated, and emphasised its external vulnerabilities.

It disclosed this in a report titled, ‘Nigeria’s weaker reserves highlight external risk and policy challenges’, following the recent publication of the CBN’s financial statements.

READ ALSO: Naira Tumbles Against Dollar As CBN Vows BDC Operators Clampdown

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The report added that, “Fitch estimates, partly based on our survey data, that CBN swaps with domestic banks were $10bn – $12bn at end-2022, and are likely to remain close to that level, but there is less visibility on swaps it may have with international counterparties.

“We anticipate that most of these domestic swaps will continue to be rolled over, reflecting incentives for banks to invest the naira received in high-yielding sovereign securities and the sector’s limited reliance on swaps for foreign-currency liquidity given its sizeable foreign-currency placements with international banks.”

It said the recent publication of consolidated financial statements to end-2022 by the CBN, the first for many years, suggested the net reserve position may be weaker than we had anticipated. The statements, which confirmed sizeable liabilities, increased transparency around Nigeria’s reserves, but important gaps remained, preventing a reliable assessment of the net reserve position.

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Fitch said, “When we affirmed Nigeria’s rating at ‘B-’ with a Stable Outlook in May, we stated that external finances were a key rating sensitivity. We estimated that around 30 per cent of Nigeria’s gross reserves (which were $37bn at end-2022) comprised swaps with domestic banks, although we considered that some other reserves could well be encumbered.”

READ ALSO: London-bound Nigerian Student Dies Aboard Air Flight

The credit rating agency highlighted that the CBN financial statements indicated that liabilities as of the end of 2022 included $7.5bn securities lending ($5.5bn of which was short term), and $6.8bn short-term liability from foreign-currency forward payables.

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It stated that uncertainty surrounded the near $32bn of “FX forwards, OTC futures, and currency swaps”, which were recorded as an off-balance-sheet commitment but are not broken down.

It noted that this could include some non-deliverable contracts settled in naira, which would not be a drain on reserves, as well as commitments of a longer tenor.

Fitch said the recent exchange-rate liberalisation and improvements in the overall monetary policy framework could strengthen the country’s credit profile by easing foreign-currency supply constraints, but a recent loss of reform momentum and the constrained reserve position highlighted the significant challenges these policy adjustments faced.

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It noted that the reserve disclosures offset more positive recent developments for Nigeria’s credit profile.

READ ALSO: FG Borrowing From CBN Hit N25tn In March – Report

Recently, JP Morgan disclosed that the country’s total currency swaps stood at $21.3bn as of the end of 2022. It stated that the slow net FX reserves meant continued FX market pressures.

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The Central Bank of Nigeria also recently faulted a recent estimation of the country’s foreign reserves by JP Morgan saying it was presented out of context.

Making clarification on the estimation of Nigeria’s reserves, the Director of Monetary Policy Department, CBN, Hassan Mahmud, noted, “We have the numbers there. The central bank’s reserves are on our bank net. Yes, the figure you see today may not be exactly to the last decimal point, but you have that picture that you are seeing there.”

He added, “We have $33bn, there is an IMF facility there, the SDR is also there, we have the JP Morgan numbers that you mentioned, we have forwards, they are all there.”

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NNPCL Reduces Fuel Price After Dangote Refinery’s Adjustment

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The Nigerian National Petroleum Company Limited has reduced its premium motor spirit pump price on Thursday, according to DAILY POST.

It was confirmed that NNPCL retail outlets in the Federal Capital Territory, Abuja, have reduced their pump price to N890 per litre from N945.

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This new fuel price has been reflected in NNPCL retail outlets such as mega station Danziyal Plaza, Central Area, Wuse Zone 4, Wuse Zone 6, and other of its filling stations in the nation’s capital.

READ ALSO:N5bn Damage: NNPCL Secures Appeal Court Victory Against Ararume

The latest downward review of fuel price in NNPCL outlets represents an N55 reduction in fuel pump price.

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It was reduced to N890 per litre this afternoon, down from N945,” an NNPCL fuel attendant told DAILY POST anonymously on Thursday.

This comes a Nigerian filling station, MRS Empire Energy, on Thursday adjusted their fuel pump price to N885 and N946 per litre, down from N910 and N955 per litre.

The latest fuel price reduction trend is unconnected to Dangote Refinery’s ex-depot petrol price adjustment by N30 to N820 per litre from N850 and the price of crude oil in the international market.

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Dangote Refinery Reduces Fuel Price

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Dangote Petroleum Refinery has announced a reduction in the ex-depot (gantry) price of Premium Motor Spirit, PMS, commonly known as petrol, by N30, from N850 to N820 per litre, effective from August 12, 2025.

This was disclosed in a statement by the company’s spokesman, Anthony Chijiena, on Tuesday.

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The 650,000-barrel-per-day plant said the move is part of its unwavering commitment to national development, assuring the public of a consistent and uninterrupted supply of petroleum products.

READ ALSO:Dangote Refinery Gets New CEO

In line with our dedication to operational excellence and sustainable energy solutions, Dangote Petroleum Refinery will commence the phased deployment of 4,000 CNG-powered trucks for fuel distribution across Nigeria, effective August 15, 2025,” said Chijiena.

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The announcement comes as the refinery prepares to commence direct fuel distribution nationwide. The development is expected to lead petroleum product marketers to reduce their pump prices in the coming days.

In Abuja, the retail fuel price stood between N885 and N970 per litre as of Tuesday evening.

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Indian Refiners Abandon Russia For Nigerian Crude, As Dangote Refinery Relies On US

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India Refineries have abandoned Russian crude for Nigerian crude, while domestic refiner Dangote Refinery relies heavily on West Texas Intermediate crude from the United States of America.

This followed a recent sanction threat by US president Donald Trump on India over continued patronage of Russian crude.

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According to Reuters, industry sources said that Indian Oil Corporation recently bought one million barrels of Nigeria’s Agbami crude for September 2025 delivery in a tender awarded to global trader Trafigura.

Also included are one million barrels of Angola Girassol, one million barrels of US Mars, three million barrels of Abu Dhabi Murban, and two million barrels of Nigerian oil, according to Reuters.

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The report noted that the purchase is part of a broader sourcing spree that has seen Indian refiners secure millions of barrels from non-Russian sources post July 2025.

Meanwhile, Indian refiners secured purchases of Nigerian crude grades; the $20bn Dangote Petroleum Refinery in Ibeju-Lekki, Lagos, is relying on around 60 percent on US and other imoorts to feed its processing units.

Data showed that the refinery imported an average of 10 million barrels in July 2025, saying it was increasingly relying on the US for its feedstock despite the naira-for-crude deal with the Federal Government, which kicked off in October last year.

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According to Reuters, the Indian Oil Corp and Bharat Petroleum have bought a million barrels of non-Russian crude billed for delivery in September and October after the US pressured India to halt purchases from Russia.

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Indian state refiners had been largely absent from the Nigerian crude market spotlight since 2022; they have in the past concentrated on Russian crude amid the Russian-Ukrainian war. However, the Indian refiners paused Russian purchases in late July 2025 after pressure from US President Donald Trump.

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On the part of Dangote Refinery, data from commodities analytics firm Kpler showed that in July, US barrels accounted for about 60 percent of Dangote’s 590,000 barrels per day of crude intake, with Nigerian grades making up the remaining 40 percent.

In July, the Dangote refinery’s crude imports surged to a record 590 kbd—driven largely by US barrels overtaking Nigerian supply for the first time—amid ongoing domestic sourcing challenges, Kpler reports.

“While WTI has held a significant share in Dangote’s import slate since March, this is the first time US crude has overtaken Nigerian supply—a shift driven by several factors,” Kpler stated.

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