Big Boost for Naira As Nigeria’s Foreign Reserves Hit 2-Year High

• The Central Bank of Nigeria has revealed that Nigeria's foreign reserves are now above the $40 billion mark
• The increase will come as a welcome development for the CBN as it fights to help the naira recover in the foreign exchange market
• The value of the Nigerian currency has been on a low no thanks to demand pressure due to high demand

Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.

Since the start of November 2024, Nigeria's foreign exchange (forex) reserves have recorded a $402.5 million increase, boosting the Central Bank of Nigeria's fight to help the naira recover its lost value.

Data from the Central Bank of Nigeria website showed that Nigeria's foreign reserves hit $40.23 billion on Wednesday, November 13, compared to $39.83 billion it opened the month.

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According to data from the CBN, the last time the reserves is above $40.2 billion was on January 25, 2022, when $40.21 billion was reported.

Factors leading to rise in FX reserves

The growth is due to several factors, including rising oil prices, improved diaspora remittances, and CBN’s plan to stabilize the local naira.

Analysts see the rise in FX reserve as a positive development for Nigeria’s economy, providing a buffer against external shocks and supporting Nigeria’s ability to meet its financial obligations.

Naira to benefit from reserves gain

The rise in reserve will be good news for the Nigerian currency, which has endured a severe beating in the foreign exchange market.

FMDQ securities reports that at the the Nigerian Autonomous Foreign Exchange Market (NAFEM), the naira closed at N1650 a dollar.

This represents a second straight trading day appreciation.

After falling to record low, naira bounces back

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Naira Sets a new exchange rate in official, parallel markets as dollar supply drops

Earlier, Legit.ng reported that the value of the naira has appreciated against the US dollar in the official foreign exchange markets.

The appreciation of the naira follows the improvement of foreign exchange supply in the official window.

BMI, a US-based research firm, has predicted that Nigeria's naira will fall to N1,993 per US dollar by 2028.

Source: Legit.ng