Nigeria’s external reserves are projected to rise to around $45 billion by the end of 2025, strengthening the Central Bank of Nigeria’s (CBN) ability to stabilize the foreign exchange market and the wider economy, according to a report by Punch.
CBN data showed that reserves climbed to $41.11 billion on August 22, the highest level in nearly four years, up from $39.54 billion on August 1.
This marks a $1.56 billion (3.95%) increase in less than a month, reversing previous declines linked to external debt repayments.
Analysts at Cowry Assets Management said in their weekly market outlook that the momentum could continue, driven by steady offshore inflows and planned government external borrowings.
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“The combination of these factors should keep the reserves on an upward trajectory in the coming months. Our projection suggests that Nigeria’s reserves could rise to about $45bn by the end of 2025, provided global risk conditions remain broadly supportive and offshore flows are not significantly disrupted,” the analysts noted, adding that a stronger reserve position would give the CBN more flexibility to manage the FX market and maintain relative naira stability across both official and parallel markets.
Meristem Securities analysts shared a similar view, saying reserves are likely to remain above $40 billion, provided oil receipts, portfolio inflows, and non-oil exports continue to improve.
They argued that the stronger reserve position would enhance CBN’s ability to stabilize the naira, boost investor confidence, and support macroeconomic balance.
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Meanwhile, experts at AIICO Capital highlighted the crucial role of CBN intervention in maintaining FX stability.
They noted that the bank injected $50 million into the market last week, alongside inflows from oil exporters, which helped narrow spreads and stabilize trades.
Despite this, the naira closed at ₦1,536.42/$ on Monday, about 0.09% weaker than the previous day.
While analysts welcomed the positive momentum, they cautioned that risks remain, particularly from potential shifts in global financial markets or sudden reversals in portfolio inflows.
Still, they described the current build-up as a “significant achievement” for Nigeria’s external stability, at a time when many emerging markets are grappling with vulnerabilities.
Image Credit: Punch Newspapers
