Nigeria’s foreign exchange reserves have surged past the $41 billion mark in August, recording their strongest level since December 2021. The reserves rose by over $3 billion in just over a month, according to data from the Central Bank of Nigeria (CBN), marking a significant recovery after a challenging start to the year.
The reserves crossed $40 billion on August 7, just days after closing July below $39.4 billion, and further climbed to $40.5 billion on August 12 before breaching the $41 billion threshold a week later. This growth represents a 3.7% gain month-to-date, equivalent to about $1.46 billion in less than three weeks. On average, inflows have expanded by $81 million per day, driven by improved external receipts and reduced outflows.
The CBN attributed the rebound to stronger capital inflows, higher crude oil production, rising non-oil exports, and lower import demand. Nigeria, Africa’s largest oil exporter, has benefited from firming oil prices and improved output, while portfolio investors are beginning to return, attracted by the apex bank’s policy reforms and higher domestic yields.
Analysts say the reserves boost gives the CBN greater flexibility in defending the naira and maintaining market stability. “The return to $41 billion restores a level of comfort missing since 2021,” said David Adonri, Vice Chairman of High Cap Securities. He noted that a deeper reserve base strengthens Nigeria’s capacity to manage liquidity shocks, meet external obligations, and reinforce investor confidence.
Despite the August surge, experts caution that sustaining this momentum will require policy discipline, stable oil revenues, and stronger non-oil FX inflows. With debt servicing costs still high and global markets volatile, Nigeria’s ability to maintain this trajectory remains uncertain. For now, the reserves recovery signals a positive outlook, offering critical support for naira stability and macroeconomic confidence.
Source: The sun