The naira gained marginally against the US dollar on Thursday as Nigeria’s external reserves climbed to a four-year peak of $41 billion, according to figures released by the Central Bank of Nigeria (CBN).
CBN data shows that reserves rose to $41.00 billion on August 19, 2025, reflecting a year-on-year increase of $4.53 billion, or 12.42 percent, from $36.47 billion recorded in August 2024. The last time reserves touched this level was March 12, 2021, when they stood at $41.08 billion.
At the Nigerian Foreign Exchange Market (NFEM), the naira appreciated by N0.95, closing at N1,535.78/$1 compared to N1,536.73/$1 on Wednesday.
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In the parallel market, the exchange rate held steady at N1,545/$1, while GTBank maintained its card rate for international transactions at N1,543/$1, after a slight drop earlier in the week.
Analysts at United Capital noted that the naira appreciated by 1.4 percent in July, moving from N1,552/$1 in June to N1,530/$1.
They added that the sustained rise in reserves, which ended July at $39.4 billion on a 30-day moving average, now covers more than 9.5 months of imports.
“The actual reserve level is now above $40 billion, covering over 9.5 months of import needs,” United Capital stated.
According to BusinessDay’s report, the increase has been attributed to a mix of factors, including CBN’s foreign exchange reforms, higher diaspora remittances, improved foreign portfolio inflows, increased crude oil production, and reduced oil losses, all of which have contributed to exchange rate stability.
FBNQuest analysts further emphasized that the reserves boost enhances the CBN’s ability to intervene in the FX market, maintaining liquidity and investor confidence.
Balance of payments data as of December 2024 indicates that Nigeria’s gross reserves were sufficient to cover 11.9 months of merchandise imports and 8.2 months including services.
Experts also highlight that declining FX demand—driven by reduced import activity amid high costs—has eased pressure on the reserves.
Looking forward, continued foreign inflows and expected external borrowings are projected to sustain growth, with reserves likely to rise to around $40.1 billion by the end of 2025.
IMage Credit: Puunch Newspaper
