Naira Strengthens Against Dollar as Nigeria’s Currency Reserves Hit Three-Year High

The Nigerian naira gained significantly against the US dollar, marking its highest appreciation in two weeks, following a boost in the country’s foreign-exchange reserves. The local currency strengthened by 0.6%, reaching 1,530 to the dollar, driven by a surge in the Central Bank of Nigeria’s reserves, which hit the highest level in over three years. This marked improvement follows a strategy by the Central Bank to reduce liabilities and increase market confidence.

The Central Bank of Nigeria reported that net foreign-exchange reserves had increased nearly sixfold, climbing to $23 billion by December, compared to the previous year. This sharp rise came as the central bank reduced swaps and forward obligations, which helped stabilize the market. The CBN’s move aims to rebuild public trust in Nigeria’s financial system and boost the value of the naira.

This is the first official update on Nigeria’s reserves since 2023, a period marked by controversy over large financial deals with JPMorgan and Goldman Sachs, which raised questions about the true state of the country’s external reserves. The Central Bank’s latest reports indicate that Nigeria’s total gross reserves rose to $38.33 billion by the end of March 2025, continuing an upward trend.

Looking ahead, the Central Bank aims to further strengthen the naira by continuing to build up its reserves. The CBN expects improved oil production levels and a more favorable export environment to support the economy and help stabilize the currency, which had depreciated significantly after President Bola Tinubu’s 2023 economic reforms.

Source: business day