Nigeria’s external reserves have experienced a remarkable resurgence, reaching a six-year high of $42.03 billion on September 19, 2025. This achievement marks a significant turnaround from the lows of $37.18 billion recorded in July 2025 and signifies renewed strength and stability for the nation’s foreign exchange market. The consistent growth in reserves throughout September, with 13 consecutive daily increases across 14 reporting days, demonstrates a sustained upward trend, unlike previous temporary spikes. This consistent growth has injected a sense of optimism into the Nigerian economy and instilled confidence in the Central Bank of Nigeria’s (CBN) ability to manage the exchange rate and address external obligations.
The surge in reserves is particularly noteworthy given the challenges faced earlier in the year. Falling oil prices, capital flow reversals, rising import demand, and foreign exchange market interventions had placed significant pressure on Nigeria’s reserves. The current upswing suggests a potential shift in these dynamics, driven by factors such as increased oil earnings, improved foreign exchange inflows, and potentially planned external borrowings. This resurgence strengthens Nigeria’s import cover, a crucial indicator of external credibility, and provides the CBN with greater flexibility to intervene in the foreign exchange market, supporting the stability of the naira.
The consistent growth in reserves throughout September reflects a positive trend. The increase of $610.8 million, or 1.47 percent, between September 1 and 19, averaging about $47 million in daily accretion, signals a healthy inflow of foreign exchange. The latter half of the month witnessed even stronger growth, with reserves expanding by nearly $583 million in just four business days between September 15 and 19. This accelerated growth points to robust foreign exchange inflows and a potential slowdown in outflows, further solidifying the positive trajectory of Nigeria’s external reserves.
Compared to previous periods, the current rally demonstrates a more sustained and robust recovery. The year-to-date growth of $1.15 billion, or 2.83 percent, from $40.88 billion at the close of 2024 indicates a positive overall trend. The substantial gain of $4.85 billion, or 13.05 percent, since the July low of $37.18 billion underscores the resilience of the Nigerian economy and its ability to rebound from earlier pressures. This recovery not only surpasses all previous 2025 levels but also restores market confidence in Nigeria’s external buffers, which are critical for exchange rate management, investor sentiment, and debt servicing.
The achievement of exceeding the $42 billion mark in external reserves holds significant implications for the Nigerian economy. This milestone boosts market confidence, attracts fresh portfolio inflows into local assets, and eases concerns about Nigeria’s ability to meet its external obligations, including debt servicing and funding imports. The strengthened reserves also provide the CBN with increased leverage to stabilize the foreign exchange market and maintain the relative stability of the naira. Market analysts project a further rise in reserves to around $45 billion by the end of 2025, driven by anticipated offshore inflows, improved oil earnings, and planned external borrowings.
While the current trajectory appears promising, potential risks remain. Global financial volatility, a reversal in portfolio inflows, or weaker oil production could disrupt the positive momentum. However, the current build-up represents a significant achievement for Nigeria, especially in a global context where many emerging markets are facing external vulnerabilities. Maintaining this positive momentum requires sustained foreign exchange inflows from crude oil exports, non-oil revenues, diaspora remittances, and portfolio investments. Prudent fiscal and monetary policies, along with transparent foreign exchange management, will be crucial in consolidating these gains and ensuring long-term external stability for Nigeria. The September rally offers a valuable opportunity for policymakers to further strengthen the Nigerian economy and build on this newfound strength.
