Naira Strengthens Against Dollar as Nigeria’s Reserves Hit $38.5 Billion
- The Nigerian currency rebounded against the US dollar at the foreign exchange market after two days of depreciation
- The local currency’s rebound was supported by a rise in foreign reserves and improved market sentiment, driven by inflows from foreign portfolio investment (FPIs)
- Data from the Central Bank of Nigeria showed that the naira’s spot rate appreciated on Thursday, July 24, 2025
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
Nigeria’s local currency, the naira, appreciated against the US dollar at the Nigerian Foreign Exchange Market (NFEM), buoyed by a boost in foreign reserves and improved market sentiment.
According to official data from the Central Bank of Nigeria (CBN), the naira traded at ₦1,534.78 per dollar on Thursday, stronger than the ₦1,535.61 recorded the previous day.
Source: Getty Images
This marks a reversal from a brief two-day slump, signalling renewed stability in the exchange market.
Foreign reserves climb to $38.5 billion
According to reporting by Market Force Africa, Nigeria’s external reserves rose significantly to about $38.5 billion, reflecting a daily increase of $132.75 million.
The reserve build-up is credited to multiple inflows, likely from oil exports, diaspora remittances, and increased foreign portfolio investment (FPI) participation.
Analysts believe the growing reserves give the CBN more firepower to intervene in the FX market and defend the naira when necessary.
Improved dollar supply calms pressure
Commenting on market dynamics, AIICO Capital Limited noted that foreign exchange supply in the interbank market received a notable boost from the CBN and stronger FPI inflows.
This additional liquidity helped cool demand-side pressure, although traders say the appetite for dollars remains elevated.
Despite the increase in demand, the intraday trading range remained relatively stable, with highs at ₦ 1,533.50 and lows at ₦1,533.45, indicating reduced volatility.
Oil prices edge higher on global trends
Supporting the external reserve build-up is a favourable turn in global crude oil prices. Benchmark Brent crude rose by 68 cents to trade at $69.19 per barrel, while U.S. West Texas Intermediate increased by 86 cents to $66.11 per barrel.
Analysts attribute the upward move to falling U.S. inventories, which dropped by 0.8% last week, signalling increased demand from the world’s largest economy.
Gold prices retreat on trade optimism
In contrast, gold prices dipped as optimism over global trade eased demand for safe-haven assets. Spot gold fell by 0.54% to $3,369.50 per ounce, while U.S. gold futures closed 0.72% lower at $3,372.65.
With trade tensions easing, investor appetite has shifted back toward riskier assets, which could benefit frontier and emerging markets, such as Nigeria.
Market outlook remains cautiously optimistic
With external reserves climbing and the naira showing signs of resilience, analysts remain cautiously optimistic. A stable FX market could foster investor confidence and ease inflationary pressures if sustained.
However, the balance remains delicate, as demand for dollars remains high and global oil prices continue to be a critical driver of Nigeria’s foreign exchange fortunes.
Source: Getty Images
Naira nears an equal exchange rate
Legit.ng previously reported that the naira’s depreciation against the US dollar in the Nigerian Foreign Exchange Market (NFEM) has led to the convergence of official and parallel market rates.
Data from the Central Bank of Nigeria (CBN) showed that on July 17, 2025, the gap between the official and black market windows settled at less than N2.
The development came as the naira closed trading on July 17, 2025, at N1,533.11 per dollar in the official market, with an intraday high reaching N1,538 and an intraday low at N1,520 before closing at N1,536 per dollar.
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Source: Legit.ng
