Nigeria’s foreign exchange reserves have recorded a steady rise in recent weeks, boosting confidence in the local currency and triggering a rally in the naira across official and parallel markets.
Data released by the Central Bank of Nigeria (CBN) on Monday showed that the country’s foreign reserves climbed to $37.5 billion, reflecting inflows from crude oil sales, improved remittances, and foreign portfolio investments. The development has eased pressure on the naira, which had faced significant volatility earlier in the year.
At the official Investors’ and Exporters’ (I&E) window, the naira strengthened to ₦1,210/$1, appreciating by more than 6 percent compared to last week’s close. Similarly, traders in the parallel market reported a surge in supply, with the naira exchanging at ₦1,220/$1, narrowing the gap with the official rate.
Currency analysts attributed the rally to renewed confidence in the CBN’s forex management policies and recent measures to curb speculative trading. They noted that the rise in reserves provides the apex bank with greater firepower to stabilize the market.
“The increase in foreign reserves is a positive signal to investors and market participants. It reassures everyone that the CBN has the capacity to intervene when necessary, which is why we are seeing improved liquidity and stronger naira performance,” said a Lagos-based economist, Dr. Samuel Adeoye.
Market operators also highlighted the impact of tighter monetary policies and inflows from international oil companies (IOCs), which have boosted dollar supply.
The CBN, in a statement, reiterated its commitment to a stable and transparent forex market, assuring that it would continue to implement reforms to attract foreign capital and sustain the momentum in reserves growth.
Financial experts, however, cautioned that Nigeria must sustain export earnings and strengthen non-oil revenue sources to maintain long-term stability in the foreign exchange market.
