The naira closed the week flat at N1,535 towards the US greenback within the official overseas alternate (FX) market, supported by improved liquidity and a notable rise in exterior reserves, which have now surpassed the $41 billion mark.
By the tip of 5 buying and selling days on Friday, the naira depreciated marginally by N1.36 to N1,535.03 per greenback, representing a 0.08% change from N1,533.67 recorded on Monday. Each day, the native forex confirmed slight appreciation, gaining N0.75 because the greenback was quoted at N1,535.03 on Friday, in comparison with N1,535.78 on Thursday, in line with knowledge from the Central Financial institution of Nigeria (CBN).
Week-on-week, nonetheless, the naira weakened barely by 0.16%, dropping N2.52 from the N1,532.51 per greenback stage it closed on the earlier Friday, primarily based on official knowledge.
Within the parallel market, the naira remained steady at N1,545 per greenback all through the week. In the meantime, GTBank’s FX fee for worldwide transactions fell barely to N1,542 on Friday, down from N1,543 on Thursday and N1,545 earlier within the week.
Offering assist to the alternate fee, Nigeria’s exterior reserves climbed previous the $41 billion mark, closing at $41.07 billion as of August 21, 2025, in line with the CBN.
As of August 19, 2025, Nigeria’s overseas forex reserves grew to $41.00 billion. This represents a year-on-year improve of $4.53 billion, or 12.42%, in comparison with $36.47 billion on the identical date in 2024. The final time reserves reached this stage was March 12, 2021, once they stood at $41.08 billion.
Learn additionally: Naira gains as external reserves hit four-year high of $41.00bn
The CBN’s authority to handle exterior reserves stems from Part 2 of the CBN Act 2007, which mandates the Financial institution to “preserve exterior reserves to safeguard the worldwide worth of the authorized tender forex.” Nigeria’s reserves are primarily held in US {dollars}.
A latest report by United Capital highlighted that the naira appreciated by 1.4% in July, enhancing from N1,552/$1 in June to N1,530/$1. The hole between the official and parallel market charges remained slender. Exterior reserves additionally rose steadily all through July, closing at $39.4 billion on a 30-day transferring common. “The precise reserve stage is now above $40 billion, masking over 9.5 months of import wants,” analysts at United Capital said.
This development in reserves has been attributed to a mixture of FX market reforms by the CBN, stronger diaspora remittances, elevated overseas portfolio inflows, improved crude oil output, and diminished oil losses. These components have collectively supported alternate fee stability and gradual naira appreciation.
Analysts at FBNQuest famous that the latest enhance in reserves offers the CBN with higher flexibility to proceed its intervention technique within the FX market, aiding liquidity and serving to to take care of stability within the alternate fee.
As of July 2025, Nigeria’s gross reserves have been adequate to cowl 11.9 months of merchandise imports and eight.2 months when providers have been included, primarily based on the steadiness of funds knowledge for the 12 months ending December 2024. This strong exterior buffer is seen as essential for sustaining investor confidence, particularly amid ongoing world financial uncertainties.
The month-on-month improve in reserves has largely been pushed by constant overseas investor inflows, signaling renewed optimism in Nigeria’s financial outlook. This resurgence is underpinned by enticing carry-trade yields, enhancing macroeconomic fundamentals, and a extra steady FX setting.
