Naira Gains as Nigeria’s Foreign Reserves Near S40 Billion
The Nigerian naira saw a modest appreciation in the official exchange window, bolstered by a surge in foreign reserves, which now stand just shy of $40 billion. This uptick, attributed to sustained FX inflows and robust reforms, is fostering renewed investor confidence as higher debt market yields further attract foreign currency into Nigeria’s economy.
Spot data from the FMDQ Exchange showed the naira appreciating by 0.33%, closing at ₦1,671.32 per US dollar in the official market on Tuesday. This gain reflects a reduced demand for the dollar as markets anticipate the Central Bank of Nigeria’s (CBN) FX auction later in the week. In the parallel market, the naira also strengthened, closing at ₦1,710 to the dollar, a gain of ₦15 as Nigerians curbed imports in response to tightened household budgets. The current exchange rate gap between official and parallel markets has thus narrowed to ₦39, down significantly from previous highs recorded in October 2024.
Central Bank data indicates that foreign reserves have climbed to $39.956 billion, sustained by a steady inflow of foreign currency despite ongoing global market uncertainties. October inflows into the Nigerian Autonomous Foreign Exchange Market (NAFEM) rose sharply by 40.2%, reaching a five-month high of $3.04 billion. This boost largely resulted from a substantial rise in foreign inflows, accounting for 44.6% of the total.
Meanwhile, oil prices remained firm, with Brent crude at $76.08 and WTI at $72.55, benefiting from OPEC+’s postponement of planned production hikes. Gold, seen as a safe haven in times of political uncertainty, surged to $2,750.50 per ounce amid a close U.S. electoral race between candidates Donald Trump and Kamala Harris.
As analysts monitor the impact of these trends, the FX inflows and stabilising reserves signal a promising step towards further strengthening the naira, even as global and local markets navigate a complex landscape. Glo’s Jolly Win Promo Continues to Make Millionaires
