Nigeria’s external reserves have risen by $4.467 billion in the past three months, a 12 per cent increase and the highest level since November 2021, following improved investor confidence in the Nigerian economy and increased remittances.
This is as the value of the naira continued to record appreciation at both the official and parallel ends of the foreign exchange market. Traders sold the dollar at N1,501.49 in the Nigeria Autonomous Foreign Exchange Market (NAFEM), the highest level since March 2025.
According to data by the Central Bank of Nigeria (CBN), external reserves rose for the 10th week running, rising to $41.663 billion as of September 11, 2025, compared to $41.422 billion at the beginning of September.
The reserves, which had risen to over $40 billion around March this year, had depreciated to $37 billion in June before rising to $39.543 billion in August before its further accretion of 12.01 per cent in September.
According to analysts at Cowry Assets Management, the incremental build-up in the reserves, “provides a critical buffer against external vulnerabilities such as volatile oil prices and currency pressures. It also enhances the Central Bank of Nigeria’s (CBN) capacity to intervene in the foreign exchange market, when necessary, thereby helping to stabilise the naira.”
The governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, had disclosed that inflows from Nigerians in the diaspora had tripled in recent months, rising from $250 million earlier in the year to $600 million monthly, prompting a projection that the figure would double by next year.
Riding on the successes of the various reforms of the apex bank, Cardoso said, ‘By next year, we project that there will be a billion dollars a month of diaspora remittances.
As far as we are concerned, we have done everything to enable that to happen.’
The improved foreign exchange buffers had seen the value of the naira appreciate to N1,501 to the dollar at the NAFEM from N1,531.57, which it sold to the dollar at the end of trading activities in August.
Last week, the naira appreciated by 0.89 per cent week-on-week, buoyed by improved liquidity and sustained dollar inflows. Likewise, the parallel market posted a 1.85 per cent gain, with the naira strengthening to an average of N1,510 to the dollar, reflecting renewed trader confidence and a moderation of speculative activity in the informal market.
In the forwards market, the naira rates appreciated across the 1-month (+1.8% to N1,533.03/$), 3-month (+2.6% to N1,586.34/$), 6-month (+3.8% to N1,663.17/$) and 1-year (+5.6% to N1,814.93/$) contracts.
In the near term, analysts at Cordros Research say they expect the naira to remain stable, underpinned by resilient forex market liquidity and improving domestic inflows. “Anticipated capital inflows should benefit from the expected Fed rate cut and broader easing in global yields, which could bolster investor appetite for naira-denominated assets.
“At the same time, stronger non-oil export receipts and reduced incentives for speculative positioning should reinforce the positive momentum and suggest a more balanced forex market outlook,” analysts noted.
