Big Win for Naira: Strong Reserves and CBN Moves Push Dollar to Lowest in Months
- The naira has remained strong in the official and parallel markets amid robust reserves
- The new exchange rate of the naira to the dollar signals a rebounding economy as the Central Bank of Nigeria (CBN) steps up efforts
- Recently, analysts have predicted that the naira will remain stable due to continued dollar inflows
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Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
The Nigerian currency is on a massive resurgence in the foreign exchange markets.
Data from the Nigerian Foreign Exchange Market (NFEM) shows the local currency is on a strong rally against the US dollar, which is currently at a seven-month low.
Source: Getty Images
The naira gains N15 in one week
On Wednesday, September 3, 2025, the naira appreciated further, trading at N1,522 per dollar, up from N1,525 the previous day.
The naira has been on a stable climb against the US greenback for most of the week, gaining over N15.
Riding on the back of surging external reserves, experts say the naira’s stability will be long-term, considering CBN’s interventions and hawkish stance.
Experts predict long-term naira stability
A prior report by Legit.ng disclosed that financial experts and analysts have hailed the current naira stability amid rising inflows and buoyant reserves.
They believe the naira will remain largely stable, supported by strong forex liquidity and a more efficient FX market.
The naira stands strong against USD
Industry and market watchers explain that sustained inflows from foreign portfolio investors, stronger non-oil exports, and limited incentives for naira speculation will drive the local currency’s stability.
Legit.ng previously reported that the local currency firmed up against the dollar, appreciating by 0.23% to close at N1,531 per dollar.
The naira also rallied in the parallel market, gaining 0.97% weekly to settle at N1,54O per dollar.
CBN’s policies: Experts predict long-term gain
The naira’s recent rebound has been driven by the Central Bank of Nigeria’s (CBN) intervention of $50 million in the foreign exchange market, followed by FPI inflows driven by the OMO auction.
BusinessDay quotes the president of the Association of Bureaux de Change Operators of Nigeria (ABCON), Aminu Gwadabe, as saying that stronger forex inflows into the economy will sustain the naira’s long-term stability.
The ABCON boss stressed that the CBN has been cultivating multiple FX sources to boost dollar inflows and ensure wider access to manufacturers and retail users.
Dollar inflows: Reserves gain in August
Amid the increased inflows, the National Bureau of Statistics said that capital inflows into the economy hit $5.6 billion in Q1 2025.
According to the NBS data, the banking sector accounted for $3.1 billion, representing 55.44% of total inflows.
Experts at Cordros Securities predicted the naira’s stability, highlighting that gross FX reserves rose to their peak since December 2021, rising by $353.47 million weekly to $41.08 billion on August 21, before hitting $41.10 billion on August 22.
CBN’s data showed that reserves reached $42.72 billion on August 13 due to rising inflows and a marginal rise in crude output.
Source: Getty Images
The gross reserves rose from $39.3 billion on August 1, $39.5 billion on August 6, reaching $40.2 billion on August 8, 2025.
Experts say the sustained reserve gain and reduced inflation, and steady currency show the positive outcomes of the government’s policy.
Naira strengthens across FX markets
Legit.ng earlier reported that the naira appreciated in all forex markets following continued accretion in external reserves.
Investors' confidence was bolstered as the nation’s external reserves gained $1.7 billion in August, according to the latest data from the Central Bank of Nigeria (CBN).
The CBN data showed that the external reserves rose to $41.27 billion in the review period, as Olayemi Cardoso, CBN governor, said foreign remittances averaged $600 million in August.
Source: Legit.ng
