Nigeria’s gross foreign reserves have continued their upward trajectory, recording a remarkable $900 million increase over three days to reach $41.19 billion as of August 25, the Central Bank of Nigeria (CBN) reported.
The reserves, which stood at $41.10 billion on August 22, reflect sustained forex inflows and a strengthened macroeconomic environment.
CBN Governor Dr. Olayemi Cardoso highlighted that the reserves, now at a four-year high, could potentially cover up to 10 months of imports, underscoring the robustness of Nigeria’s external position.
“The sustained accretion in foreign reserves is a testament to our ongoing economic reforms, prudent fiscal measures, and diversified foreign exchange inflows,” Cardoso noted.
The continued strengthening of the naira has mirrored this positive reserves movement.
At the parallel market, the naira closed at ₦1,542 to the dollar, up from ₦1,550 last week, while at the official market, it strengthened to ₦1,535 to the dollar, improving from ₦1,540 earlier.
Data from the CBN reveals that the gross foreign reserves stood at $41.07 billion on August 21, with an earlier rise to $40.72 billion on August 13, attributed to higher crude oil output and forex inflows.
The moving average of the foreign reserves reached $39.3 billion on August 1, $39.5 billion on August 6, and $40.2 billion by August 8, showing steady growth through the month.
Analysts attribute the consistent rise in reserves to several government and CBN measures, including the new FX policies, efforts to stimulate local production, and strategies aimed at reducing domestic demand pressure for foreign currency.
These reforms have been instrumental in stabilizing both the naira and commodity prices while helping reduce inflationary pressures.
The inflation rate also continues to decline, with July closing at 21.88%, supporting overall economic stability.
According to experts, the positive trends in reserves and currency stability have far-reaching implications for investor confidence and the resilience of Nigeria’s financial system.
Dr. Aminu Gwadabe, President of the Association of Bureaux De Change Operators of Nigeria (ABCON), praised the CBN’s proactive interventions.
“Under Dr. Cardoso, the apex bank has cultivated multiple FX sources to boost dollar inflows.
Initiatives such as improving diaspora remittances, granting licenses to new International Money Transfer Operators (IMTOs), implementing the willing buyer-willing seller FX model, and enhancing timely access to naira liquidity have all simplified dollar access across the economy,” Gwadabe said.
These initiatives have not only ensured higher inflows but have also improved dollar access for manufacturers, exporters, and retail users, creating a more fluid forex market.
Analysts believe that if sustained, these measures will strengthen Nigeria’s balance of payments position and further bolster the naira’s stability.
The gains in foreign reserves are expected to have positive effects on multiple facets of Nigeria’s economy.
A robust reserve base provides the CBN with greater flexibility to intervene in forex markets, defend the naira, and support imports critical for economic activities.
Economists also suggest that continued inflows and higher reserves could enhance investor confidence, encourage foreign direct investment, and reinforce Nigeria’s macroeconomic stability.
However, experts caution that sustained policy consistency, improved export earnings—particularly from oil, gas, and non-oil sectors—and the continuation of forex reforms remain crucial for long-term stability.
As the federal government and the CBN continue their reforms, market watchers remain optimistic that Nigeria’s foreign reserves trajectory will remain positive, reinforcing the naira and providing a cushion against external shocks.