Naira Strengthens as External Reserves Hit $41.2bn, Boosting Investor Confidence
Story: by Myra Chinonso August 28,2025
The naira rebounded on Wednesday, August 27, 2025, after two straight days of marginal losses, supported by a surge in Nigeria’s external reserves, which have now crossed the $41 billion mark for the first time in more than four years.
At the Nigerian Foreign Exchange Market (NFEM), the local currency gained N0.54, closing at N1,537.07 per dollar, compared to N1,537.61 recorded on Tuesday, according to data from the Central Bank of Nigeria (CBN).
In the parallel market (black market), the naira traded steady at N1,540/$, while GTBank’s FX rate for international card transactions held firm at N1,544/$, unchanged since Monday after a slight increase from N1,542 on Friday.
CBN data shows that Nigeria’s foreign reserves rose to $41.22 billion as of August 26, 2025, up from $41.00 billion recorded on August 19. This marks a year-on-year increase of $4.53 billion (12.42%) compared to $36.47 billion on the same date in 2024. The last time reserves were this high was on March 12, 2021, when they stood at $41.08 billion.
A report by FBNQuest noted that foreign exchange inflows gained momentum in July 2025, rising 24% month-on-month to $3.8 billion compared to $3.1 billion in June. However, inflows remain well below the $6.7 billion peak recorded in May.
Data from FMDQ revealed that Foreign Portfolio Investments (FPIs) remained the dominant source of FX supply, accounting for about 45% of inflows. Offshore investor inflows increased to $1.7 billion in July, up from $1.5 billion in June, signaling a cautious return of foreign investors, encouraged by carry trade opportunities and relatively stable global market conditions.
Analysts say the rebound in reserves gives the CBN stronger capacity to defend the naira, while the renewed inflows reflect gradual restoration of investor confidence in Nigeria’s economy.
