Naira Gains Massively as Nigeria’s External Reserves Hit $41.7 Billion

• Nigeria’s gross external reserves reached a four-year high this year as dollar inflows and accretion rise
• Data from the Central Bank of Nigeria (CBN) shows that the nation’s external reserves gained over $22 million in 10 days
• Experts have said the move has positively impacted the naira, which has maintained a strong stance against the dollar

Pascal Oparada, a reporter for Legit.ng, has over ten years of experience covering technology, energy, stocks, investment, and the economy.

Nigeria’s external reserves have surged further to $41.7billion, from $41.66 billion, an updated data from the Central Bank of Nigeria.

The CBN’s data includes figures from the commodity market, showing Bonny Light surging to $68.56 per barrel.

Why Nigeria’s external reserves are growing

Nigeria’s external reserves maintained an upward trajectory amid dollar sales to authorised dealers and banks to help keep the naira afloat in the official market.

According to the data, Nigeria last recorded this balance in May 2021.

CBN said that the economy has seen successive inflows from exporters and remittances from abroad.

Analysts have said that incremental build-up provides a critical support against external vulnerabilities such as volatile oil prices and currency fluctuations.

Experts are optimistic about Nigeria’s economy

“We are seeing a rebound in macro-economic data and balance, Osas Igho, a financial analyst, said.

“Based on these stats, I think the economy is coming out of the woods. The authorities should concentrate in strengthening the micro economy to benefit the masses,” he said.

According to a report by Market Forces Africa, the reserves also boost CBN’s capacity to intervene in the foreign exchange market when needed, helping the naira to stabilise.

Foreign inflows surge

Reports say foreign portfolio inflows have also been consistent, showing investors’ confidence in the FX market and CBN’s successful proving it can fund dollar repatriation.

Analysts told Market Forces Africa that the Nigerian financial market was put to the test by President Trump’s global tariff hike, which forced some foreign investors to flee.

Investors’ confidence receives a boost

The move sparked offshore investors’ rotation out of the Nigerian market, and a huge demand for the dollar was adequately met by CBN.

According to reports, the sign that the market can survive with such an unexpected shock boosted offshore investors’ confidence, triggering a steady flow of hot money into Nigeria.

With increased oil production, which stood at 1.71mbpd in July, Nigeria is positioned to experience FX receipts from hydrocarbon sales, analysts say.

The naira appreciates vs the dollar

Meanwhile, the Nigerian currency continued to surge in the official market on Monday, September 15, 2025.

The exchange rate closed at N1,495 per dollar, with the CBN fixing the NFEM rate at N1,497 against the US greenback.

The dollar was priced at a high of N1,502 per dollar and a low of N1,493 per dollar.

“We are seeing a convergence in dollar rates as CBN continues to maintain its hawkish stance against speculators,” Janet Ogochukwu, senior banker and economist, told Legit.ng on a call.

She disclosed that the current naira’s resurgence is also positively impacting other macro-economic indices, citing the drop in inflation.

“As you can see, inflation is dropping. The latest data now is at about 22.12%,” she said.

Crude prices drop, OPEC predict output increases

However, crude oil prices dipped slightly, driven by renewed concerns over sluggish demand in global demand.

According to the International Energy Agency, global demand will average about 750,000 barrels per day, citing muted consumption in emerging markets and a looming contraction in OECD demand.

OPEC, however, presented a more optimistic forecast, predicting a growth of 1.3 million barrels per day this year and 1.4 million next year, primarily driven by non-OECD nations.

China’s crude hoarding raises concerns

Beyond the demand outlook, traders remain cautious due to China’s aggressive stockpiling, which has already reached 187 million barrels this year, and the uncertain impact of new Western sanctions on Russian oil exports.

These concerns have fueled bearish sentiment, exerting downward pressure on prices despite the differing projections from the IEA and OPEC.

In contrast to the global trend, Nigeria’s Bonny Light crude saw a gain of 2.16%, closing at $68.56 per barrel.

Naira rally narrows FX gap to just N10

Legit.ng earlier reported that the disparity between the official and parallel markets drifted further, as the naira maintained its gains in all FX markets.

The naira exchange rate gap fell sharply as the local currency surged against the dollar.

The dollar rate declined on Tuesday, September 9, 2025, as the market expected the US Federal Reserve to reduce rates after a disappointing job report.

Source: Legit.ng