M10News Business Desk|21 August 2025|
Nigeria’s foreign exchange reserves have climbed to $41.00 billion as of August 19, 2025, reaching their highest level in nearly four years, according to figures released by the Central Bank of Nigeria (CBN).
The surge marks the strongest external reserve position since December 3, 2021, offering a significant buffer for the naira at a time of heightened pressure on the country’s currency and capital markets.
CBN data shows reserves added $1.46 billion in August alone, rising from $39.54 billion at the start of the month to the current $41 billion. That represents an increase of 3.7 per cent in less than three weeks, averaging around $81 million per day.
Analysts say the sharp recovery is linked to improved oil earnings, stronger remittance inflows, and a slowdown in external debt servicing that had drained reserves in the first half of the year.
“Crossing the $41 billion mark is an important psychological and financial milestone,” said Lagos-based economist Dr. Yinka Omotayo. “It enhances the CBN’s ability to intervene in the market, dampen speculation, and provide confidence to investors.”
The reserves crossed the $40 billion threshold on August 7, advanced to $40.5 billion by August 12, and reached the $41 billion milestone a week later.
Despite the rally, year-to-date gains remain modest. Nigeria’s reserves ended 2024 at $40.88 billion, meaning the current level reflects an increase of just $124 million, or 0.3 per cent, since January.
Much of the build-up has come in the past five weeks, following a relatively subdued first half of 2025 when reserves hovered between $37 billion and $39 billion. At one point in early July, they fell as low as $37.28 billion before rebounding sharply by more than $3 billion.
The turnaround is significant, reversing a pattern of prolonged depletion during 2022 and 2023, when Nigeria relied heavily on reserves to cover dollar shortages and meet debt obligations.
Market watchers say the stronger reserves will be key to the CBN’s efforts to stabilise the naira, which has faced volatile trading amid dollar demand from importers, manufacturers, and foreign portfolio investors.
“The reserves cushion gives the CBN more credibility in its interventions,” said Aisha Bello, a financial analyst at Lagos-based Afrinvest. “But sustaining this momentum will depend on oil production, global crude prices, and the pace of government borrowing.”
Nigeria relies on crude oil exports for around 90 per cent of its foreign earnings, leaving reserves vulnerable to global price swings and production shortfalls.
The government is also under pressure to maintain reserves as talks continue with international lenders and investors on financing infrastructure projects.
For now, the CBN is expected to use the stronger position to manage liquidity more aggressively and guard against speculative attacks on the naira.
Editing by M10News Business Desk | Contact: business@m10news.com
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