Nigeria’s gross external reserves hit $42 billion this week, the highest level seen since September 2019, boosted by additional inflows across sources. In Sept., total inflows into external reserves reached $692.28 million, according to data from the Central Bank of Nigeria (CBN). The nation’s foreign reserves continue to see successive inflows from hydrocarbon export revenue. Strong foreign reserves continue to boost investors’ confidence that upstreaming FX would not be difficult as they park US dollar into the financial market instruments. In addition, rising oil production remains positive for the Naira as fiscal performance maintained an uptrend relative to the recent past record of government hydrocarbon revenue. In the forex market, the Naira is testing the floor again, according to investment banking firm TrustBanc Financial Group Limited. MarketForces Africa reported that for the first time in a long time, the local currency broke the psychological barrier and traded below $1500 per dollar.
With reserves rising, spreads narrowing, and foreign confidence stabilising, the market conditions are aligning – TrustBanc said, “It is sentiment, not just supply, that ultimately decides how long the floor holds”. This week, bullish sentiment dominated the foreign exchange market this week, as the Naira extended its gains across FX windows, supported by a softer U.S. dollar and improved liquidity flows into the system. At the official market, the local unit appreciated by 0.91% week-on-week to close at N1,487.90 per dollar, marking its first break below the N1,500 band since early February 2025. The parallel market also reflected the stronger tone, with the Naira firming by 1.05% to an average of N1,521 per US dollar.External reserves improved as FX inflows and sustained CBN interventions aimed at shoring up confidence in the local unit.
The build-up in reserves reinforces the CBN’s capacity to manage supply-demand imbalances while sustaining currency stability.WTI crude futures retreated to about $63.3 per barrel on Friday, marking a third consecutive session of losses and trimming earlier weekly gains. The pull back came after U.S. President Donald Trump reiterated his preference for lower oil prices, signalling that cheaper energy takes precedence over imposing additional sanctions on Russia. His comments helped ease fears of major supply disruptions, even as Ukrainian strikes on Russian energy infrastructure earlier in the week had raised concerns about tighter global supply. Analysts expect the current stability to persist in the near term, with the Naira likely to hold within a positive trading band below N1,500 per dollar, as liquidity conditions remain supportive and global dollar weakness continues to underpin market sentiment.
Nigeria’s foreign reserves hit $42bn, highest since 2019
