Nigeria’s external reserves hit $42b on forex inflows, highest in 6 years

Nigeria’s gross external reserves have climbed to $42 billion, marking the highest level in six years, according to recent data from the Central Bank of Nigeria (CBN).

This increase is attributed to stronger earnings from hydrocarbon exports and a steady inflow of foreign exchange.

The $42 billion figure surpasses the previous high recorded in September 2019, building on a significant surge in August when reserves hit around $41 billion—crossing the $40 billion mark for the first time in nearly four years.

In September alone, CBN reported total inflows of $692.28 million, boosting the central bank’s liquidity position.

This improvement enables the CBN to better stabilize the Naira, manage economic shocks, and attract foreign investment.

Market analysts expect this positive trend to continue, which could provide a crucial buffer for currency stability and enhance investor confidence.

However, they warn that challenges such as high inflation, heavy debt burdens, and widespread poverty still pose risks to sustained economic recovery.

Experts highlight that a stronger reserve base empowers the CBN to intervene effectively in the foreign exchange market, reducing volatility in the Naira’s value.

Additionally, increased reserves signal a more stable economic outlook, which may draw more foreign capital and give policymakers greater flexibility to implement reforms.

The rise in reserves has been accompanied by gains in the local currency.

The Naira appreciated by 0.91% week-on-week in the official market, closing at N1,487.90 per dollar—the first time it has traded below the N1,500 mark since February 2025. Similarly, the parallel market saw the Naira strengthen by 1.05%, averaging N1,521 per dollar.

Stronger government revenues from oil production have also supported this currency performance.

Yet, experts caution that while rising reserves provide a foundation, they should not be viewed as a final goal. Structural issues, including inflationary pressures and fiscal imbalances, must be addressed to ensure long-term stability.

And with external reserves reaching a six-year peak and crossing key milestones in recent months, there is cautious optimism that Nigeria is moving toward a period of greater foreign exchange stability—provided fiscal discipline and economic reforms advance alongside.