Market News

From Uche Usim

Nigeria’s external reserves have surged past the $45 billion mark, according to the latest data from the Central Bank of Nigeria (CBN).

This is one of the country’s strongest positions in six years from available records.

The reserves now stand at $45.04 billion, matching the last time they reached this level on 23 July 2019.

The milestone reflects a remarkable turnaround, as the nation has added nearly $5 billion to its reserves in just a few months—a notable achievement amid widespread declines in foreign exchange buffers across many developing economies.

“The steady accumulation of reserves indicates improving inflows and a more resilient external position,” analysts say, pointing to crude oil earnings, Eurobond-related inflows, and multilateral financing as likely contributors. Higher reserves provide the apex bank with greater leverage to intervene in the foreign exchange market if necessary, helping to stabilise the naira.

Careful analysis shows that the reserve buildup is not a temporary spike but a consistent trend reflecting improved forex conditions. November began with reserves at $43.26 billion, comfortably holding above the $43 billion mark. By 18 November, reserves had risen to $44.05 billion, signalling stronger inflows and easing pressure on the foreign exchange market. The month closed at $44.67 billion, one of the highest month-end positions in recent times.

This momentum carried into December, with reserves maintaining the $44 billion range before crossing the $45 billion threshold on 4 December—a psychological and economic milestone demonstrating robust forex liquidity.

A reserve level above $45 billion strengthens the CBN’s ability to manage foreign exchange pressures and enhances investor confidence.

Foreign portfolio investors closely monitor reserve levels as a barometer of a country’s external health. Surpassing $45 billion signals that Nigeria is better positioned to meet external obligations, finance imports, and withstand external shocks, potentially attracting more capital inflows into equities and fixed-income markets.

The steady rise from $43 billion in early November to $45 billion in early December suggests genuine improvement in inflows rather than a short-term spike.

Despite this positive trajectory, the naira faced renewed pressure last week, closing at N1,454/$1 on Friday. Rising festive-season demand from importers, retailers, and consumers contributed to heightened dollar demand ahead of Christmas and New Year activities.

The milestone for Nigeria’s reserves not only underscores the country’s improving external position but also reinforces its capacity to manage forex volatility as investor confidence strengthens.