Naira rebounds after two days of losses as reserves cross $41bn

The naira on Wednesday rebounded to slight gains after two consecutive days of marginal losses, supported by rising external reserves, which have now crossed the $41 billion mark.

At the Nigerian Foreign Exchange Market (NFEM), the naira appreciated slightly by N0.54 as the dollar closed at N1,537.07, compared to N1,537.61 quoted the previous day, according to data from the Central Bank of Nigeria (CBN).

In the parallel market, popularly called the black market, the local currency remained stable at N1,540 per dollar. Similarly, GTBank’s FX rate for international transactions held steady at N1,544 since Monday, after rising from N1,542 on Friday.

Nigeria’s external reserves climbed to $41.22 billion as of August 26, 2025, CBN data showed, crossing the $41 billion mark for the first time in over four years. External reserves, which provide the CBN with the financial strength to defend the naira, had stood at $41.00 billion as of August 19, 2025. This represents a year-on-year increase of $4.53 billion or 12.42 percent compared to $36.47 billion recorded on the same date in 2024. The last time reserves were at this level was on March 12, 2021, when they stood at $41.08 billion.

A report by FBNQuest highlighted that total foreign exchange inflows into Nigeria’s FX market regained momentum in July 2025, reflecting renewed investor appetite. According to FMDQ data, FX inflows rose by 24 percent month-on-month to about $3.8 billion, compared to $3.1 billion recorded in June. However, inflows in July were still significantly below the peak of $6.7 billion recorded in May.

The recovery in inflows, while encouraging, underscores the volatility of FX liquidity. Foreign Portfolio Investments (FPIs) continued to dominate as the primary source of supply, accounting for around 45 percent of total inflows. In absolute terms, offshore investor inflows increased to $1.7 billion in July, up from $1.5 billion in June. This improvement signals a cautious return of foreign investor confidence, spurred by attractive carry trade opportunities and relatively stable global macroeconomic conditions during the period.

Hope Moses-Ashike

Hope Moses-Ashike is an Associate Editor, Banking and Finance, with more than a decade of experience reporting on Nigeria’s financial system and broader economy. She closely tracks market movements, monetary policy decisions, company disclosures, regulatory actions, economic indicators, and global developments, and interprets what they mean for businesses, investors, policymakers, and households. Her reporting helps readers understand complex issues such as inflation trends, foreign exchange market dynamics, interest rate decisions, bank performance, and investment risks. She also covers major international events and periodically travels to Washington, D.C., to report on the World Bank/IMF Spring and Annual Meetings. Her dedication to financial journalism has earned her multiple recognitions and invitations to high-level professional development programmes. She is an alumna of the International Visitors Leadership Programme (IVLP) in the United States and holds an Advanced Financial Journalism Certificate from the Press Association Training in London, UK. Her other notable achievements include completing the Lagos Business School CMC Programme, the Bloomberg Media Africa Initiative Programme, and a Master Class in Journalism at Rhodes University in South Africa.