Nigeria’s FX Reserves Climb $422m as CBN Boosts Market Intervention and Investor Confidence
Nigeria’s foreign exchange (FX) reserves grew by $422.16 million last week, bringing the total to $37.85 billion as of July 17, 2025. This marks the second consecutive weekly increase, a development largely driven by the Central Bank of Nigeria’s (CBN) aggressive intervention strategy, including an $80 million injection into the FX market to stabilize the naira. The uptick in reserves signals improved external buffers and increased investor confidence, supported by stronger oil revenues and sustained foreign portfolio inflows.
Despite these interventions, the naira depreciated marginally by 0.1% week-on-week to N1,532.11/$1 in the Nigerian Autonomous Foreign Exchange Market (NAFEM). Analysts attribute this to persistent demand pressures and structural issues in the FX market. In the forward market, the naira weakened across all tenors, indicating continued expectations of medium-term pressure on the local currency.
Analysts maintain that the CBN’s interventions and reserve build-up are essential to maintaining liquidity and market stability. The bank has adopted a more flexible FX management approach, ensuring banks and authorized dealers have access to moderate dollar inflows to meet legitimate demands. This strategy is seen as a confidence-building measure, especially for foreign investors monitoring Nigeria’s financial reforms.
Market sentiment has improved following last year’s FX policy reforms, which included the unification of exchange rates and the removal of official market restrictions. These changes have started to yield gradual but positive outcomes. Analysts expect continued near-term naira stability, provided there are no major external shocks, particularly from oil price fluctuations or global financial disruptions.
However, experts caution that sustaining this stability requires more than short-term interventions. They stress the need for deeper structural economic reforms, better fiscal coordination, and consistent monetary policy discipline. With reserves rising and investor confidence improving, the CBN is gaining critical breathing space to implement broader economic and currency stabilization reforms.
Source: The sun