Naira Strengthens to ₦1,514.86 per Dollar, Hits Six-Month High on Rising FX Liquidity and Reserves
Story: written by springnewsng September 5,2025
The naira surged to its strongest level in six months, closing at ₦1,514.86 per dollar at the official foreign exchange (FX) market, supported by improved liquidity and steady growth in external reserves.
The last time the currency performed better was on March 6, 2025, when it traded at ₦1,512.30 per dollar. On Thursday — the final trading day of the week due to a public holiday — the naira gained ₦6.59 or 0.4 percent against the greenback, recovering from ₦1,521.45 the previous day, according to figures from the Central Bank of Nigeria (CBN).
Nigeria’s external reserves were reported at $41.30 billion as of September 4, 2025, just below the four-year peak of $41.49 billion recorded the day before.
Data also showed that total FX inflows into the Nigerian economy reached $29 billion in Q1 2025, marking a 4% increase quarter-on-quarter and a 26% rise year-on-year. This growth was largely credited to tighter monetary policy and FX market reforms by the CBN.
However, FX outflows rose at a faster pace, climbing 14% q/q and 33% y/y to $13.8 billion, the highest since Q2 2020. Net FX flows stood at $15.2 billion, slightly lower than $15.8 billion in Q4 2024.
Analysts observed that much of the strength came from autonomous inflows, which jumped to $20.7 billion, the highest since the COVID-19 pandemic, though still below pre-pandemic levels. This rise was attributed to attractive interest rates that drew carry trade investors, alongside improved transparency and price discovery in the FX market.
FMDQ data further showed that foreign portfolio investment (FPI) inflows grew by 40% q/q and 101% y/y to $4.9 billion. On the other hand, CBN-driven FX outflows held steady at $10.5 billion, with external debt service obligations rising by 29% year-on-year to $1.4 billion.
Meanwhile, autonomous FX outflows more than doubled, rising 125% q/q to $3.2 billion.
Despite these pressures, analysts say the combination of stronger inflows, higher reserves, and policy reforms has kept the naira relatively stable in 2025, with the currency trading mostly between ₦1,500 and ₦1,600 per dollar.
