The Naira appreciated against the US dollar across multiple foreign exchange platforms, including Bloomberg’s BMATCH electronic system, following the Central Bank of Nigeria’s (CBN) announcement of a surge in the nation’s net foreign exchange (FX) reserves to their highest level in three years.
According to spot FX data, the local currency strengthened by N5.57, closing at $/N1,531.25 in the official market amid ongoing interventions. On the BMATCH platform, the exchange rate improved to N1,530, marking its strongest level in two weeks.
FX analysts reported that the USD/NGN pair fluctuated within a range of $/N1,525.00 to $/N1,535.00, eventually settling at $/N1,531.25 by the end of the trading session.
In a recent statement, the CBN highlighted that Nigeria’s net foreign exchange reserves (NFER) had reached their highest levels in over three years, attributing the increase to the effectiveness of recent policy measures aimed at fortifying the nation’s financial position.
The report indicated that the NFER stood at US$23.11 billion as of December 2024, reflecting a substantial increase from US$3.99 billion at the close of 2023, US$8.19 billion in 2022, and US$14.59 billion in 2021.
Since Mr. Yemi Cardoso assumed office as CBN Governor, the country’s external reserves have shown consistent growth, largely due to critical reforms designed to enhance investor confidence and attract capital inflows. These efforts have contributed to the stabilization of the Naira, despite previous currency devaluations, according to a review by AAG Capital Limited.
By the end of December 2024, Nigeria’s gross reserves had reached US$40.88 billion, marking a 24.21% year-on-year increase from US$32.91 billion at the end of 2023. Notably, the NFER accounted for 56.5% of these gross reserves, after factoring in short-term obligations such as FX forwards, securities lending, currency swaps, and outstanding contracts.
AAG Capital Limited noted in an investor briefing that this ratio serves as a reliable measure of the unencumbered foreign exchange available for immediate external obligations.
However, despite these gains, the reserves recorded a 6.2% decline year-to-date, falling to US$38.33 billion by the end of Q1 2025. This reduction was largely attributed to significant interest payments on foreign-denominated debt. Nonetheless, analysts anticipate a gradual recovery in Q2 2025, supported by higher oil production and export growth.
In the parallel market, the exchange rate remained stable at $/N1,550.00 per US dollar, widening the gap between the official and unofficial rates to 1.22% from 0.86% recorded on Friday.
As of 11:15 a.m. on Wednesday in Lagos, the Naira had gained 0.6% to reach N1,530 in spot trading on the BMATCH platform, as tracked by Bloomberg. This represented the currency’s strongest level in nearly a month and its biggest single-day gain since March 18.
Meanwhile, crude oil prices edged higher on Wednesday as investors awaited the U.S. government’s announcement of reciprocal tariffs, raising concerns over a potential global trade dispute that could impact crude demand.
Brent crude futures rose by 42 cents, or 0.6%, to $74.91 per barrel, while WTI crude climbed 53 cents, or 0.7%, to $71.73 per barrel. In addition, gold prices surged toward record highs as investors sought safe-haven assets in anticipation of U.S. President Donald Trump’s tariff measures.
Spot gold prices increased by 0.5% to $3,127.23 per ounce, while U.S. gold futures advanced by 0.7% to $3,166.30.
