Market News
Naira rebounds after two days of losses as reserves cross $41bn - BUSINESSDAY
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.
