Nigeria’s Foreign Reserves Surge to $42bn – Six-Year High Boosts Naira Stability and Investor Confidence
Nigeria’s external reserves have soared past the $42 billion mark for the first time since September 2019, hitting a six-year high and offering renewed hope for currency stability. Fresh figures from the Central Bank of Nigeria (CBN) show that as of September 19, 2025, the reserves stood at $42.03 billion — a milestone that signals stronger foreign exchange inflows and growing investor confidence in Africa’s largest economy.
The jump marks a dramatic rebound from earlier lows this year, when reserves slumped to $37.18 billion in July, sparking concerns about Nigeria’s ability to defend the naira. In just over two months, the country has recovered about $4.85 billion, with September alone adding $610.8 million. Analysts say the consistent daily build-up, 13 gains in 14 trading days, sets this rally apart from past temporary spikes.
Foreign reserves are critical to Nigeria’s economic health. A higher stockpile strengthens the CBN’s ability to stabilise the foreign exchange market, fund imports, service external debt and reassure international ratings agencies. The six-year high also provides a psychological lift for local and foreign investors who track Nigeria’s import cover and external buffers as indicators of macroeconomic stability.
Market watchers, including Cowry Asset Management, describe the September rally as a “significant milestone” that could help anchor the naira in both official and parallel markets. They project reserves could rise toward $45 billion by year-end if oil earnings remain firm, offshore inflows stay steady and planned external borrowings are executed smoothly. Economists add that sustained policy consistency and competitive yields could attract even more portfolio inflows.
Despite the upbeat data, analysts caution that global financial volatility, weaker oil production or a sudden reversal of portfolio inflows could slow the momentum. For now, however, Nigeria’s reserves story has flipped from weakness to strength. If policymakers seize this window to improve transparency in FX management and coordinate fiscal and monetary policies, the country could cement its position above $42 billion and rebuild the buffers last seen in the mid-2010s.
source: punch