Naira Strengthens as Nigeria’s External Reserves Climb to $54.9bn
By GLEBM News Desk
The naira recorded a modest appreciation in September as improved foreign exchange liquidity and stronger oil receipts helped reinforce conditions in Nigeria’s currency market, while the country’s external reserves climbed to $54.9 billion.
The naira closed September at approximately ₦1,329.16 to the dollar in the Nigerian Foreign Exchange Market, compared with ₦1,332.94 at the end of August, representing a 0.28 per cent monthly appreciation.
The movement comes amid stronger foreign exchange conditions and increased oil-related inflows, factors that have helped support liquidity in the market and improve confidence around the domestic currency.
The increase in reserves provides an additional buffer for the country’s external position and could strengthen the Central Bank of Nigeria’s capacity to manage periods of pressure in the foreign exchange market.
For businesses, sustained improvement in foreign exchange liquidity could help reduce some of the uncertainty surrounding import costs, access to foreign currency and the pricing of imported raw materials and equipment.
However, the currency outlook remains closely linked to oil receipts, capital flows, monetary policy and developments in global financial markets.
Nigeria’s recent monetary policy easing has also introduced a new dimension to the foreign exchange outlook. The CBN reduced its Monetary Policy Rate by 350 basis points in September, while changes in United States interest rates have narrowed the differential between Nigerian and US assets.
Analysts are therefore watching whether improved reserves and stronger oil receipts can continue to support the naira while monetary conditions become less restrictive.
For the broader economy, a more stable foreign exchange environment could provide relief to businesses that have faced elevated costs and uncertainty over access to dollars, although the durability of the improvement will depend on the strength and consistency of external inflows.
