Naira Strengthens as Nigeria’s Foreign Reserves Rise by $1.7bn, Diaspora Remittances Surge 200%
Story, written by Springnewsng August 30,2025
The naira posted a marginal gain against the US dollar in August 2025, supported by a rise in Nigeria’s external reserves and stronger foreign exchange inflows from foreign portfolio investors (FPIs) and diaspora remittances.
According to data from the Central Bank of Nigeria (CBN), the country’s external reserves climbed to $41.26 billion, up by $1.72 billion or 4.35% from $39.54 billion at the start of the month. The reserve build-up strengthened the CBN’s capacity to defend the naira and improve market liquidity.
Diaspora Remittances Surge 200%
CBN Governor Olayemi Cardoso revealed that diaspora remittances surged by 200% in the past two months, from $200 million monthly to $600 million, with expectations to hit $1 billion per month by 2026.
Speaking at the Delta State–Brazil Business and Investment Roundtable in São Paulo, Brazil, Cardoso explained that improved remittance channels and competitive exchange rates have reduced the need for Nigerians abroad to use unofficial routes when sending money home.
“Our exchange rate is becoming more competitive. Diaspora flows, which once stood at $200 million monthly, have now reached $600 million, and by next year, we anticipate at least $1 billion. These inflows are diversifying Nigeria’s foreign exchange earnings and reducing dependence on oil,” Cardoso said.
Foreign Exchange Inflows Recover
Nigeria’s overall FX inflows rose 24% month-on-month in July 2025, driven by stronger participation from non-bank corporates and renewed interest from offshore investors.
A report by FBNQuest showed that inflows rose to $3.8 billion in July, up from $3.1 billion in June, though still below the $6.7 billion peak in May.
Foreign portfolio investors remained dominant, contributing 45% of total inflows. Offshore investments climbed to $1.7 billion in July, up from $1.5 billion in June, as global market stability and favorable carry trade dynamics lifted investor confidence.
Outlook
Analysts note that the combination of rising reserves, strong diaspora remittances, and steady FPI inflows could help stabilize the naira in the near term. However, volatility in FX liquidity persists, with inflows still well below earlier 2025 highs.
