In a significant boost to Nigeria’s economic outlook, the country’s gross foreign exchange (FX) reserves surged to $41.05 billion on August 21, 2025, the highest level recorded in more than 44 months.
This milestone reflects ongoing improvements in key macroeconomic indicators and marks a steady upward trajectory in external reserve levels over recent weeks.
The Central Bank of Nigeria (CBN) has set its sights on a long-term target of building the nation’s FX reserves to a robust $100 billion, aiming to enhance economic resilience and dampen vulnerability amid global market uncertainties.
Just a day prior, reserves stood at $41 billion, up from $40.96 billion on August 18, showing remarkable stability and less volatility in the foreign exchange market over the past month.
Comparatively, reserves have increased by about 2.62 per cent since mid-July 202,5 when CBN Governor Mr. Olayemi Cardoso announced the gross reserves were around $40 billion. The current level, the highest since December 3, 2021, signals a sustained positive momentum driven by strategic monetary policies and improved external revenue streams.
Foreign exchange reserves play a critical role in safeguarding economic stability, underpinning currency strength, supporting import capacity, managing external debt obligations, and bolstering investor confidence.
Analysts note that movements in reserves often serve as barometers for economic health or stress.
Amidst Nigeria’s challenges of servicing a heavy debt burden and ongoing fiscal pressures, the relative stability in external reserves, coupled with a marked deceleration in inflation and the naira’s improved stability, offers renewed optimism for better economic prospects ahead.
Cardoso highlighted notable factors contributing to the reserves build-up during the July Monetary Policy Committee meeting, including increased capital inflows, higher crude oil production with improved receipts, a boost in non-oil exports, and a significant reduction in overall imports.
He reiterated robust investor interest in Nigeria’s banking sector, reinforcing confidence in the reforms and regulatory oversight being pursued.
“There is considerable international interest in investing in the Nigerian financial system. Our role as regulators is to ensure resilience, create buffers, and uphold transparency to maintain this trust,” Cardoso stated.
With reserves surpassing $41 billion, Nigeria now has a stronger buffer to defend the naira against volatility, meet crucial import needs, and service external debt, enhancing overall macroeconomic stability. The recent reserve growth reflects a combination of better oil sector revenues, tightened FX inflows management, and broader structural reforms aimed at deepening the official FX market.
When Cardoso assumed office in September 2023, Nigeria’s net usable FX reserves were severely constrained—estimated at under $4 billion after accounting for short-term obligations such as heavy forwards and swaps.
Since then, CBN’s strategic settlement of over $7 billion in swap and forward arrears, particularly debts to foreign airlines, has significantly improved the usable reserve position, paving the way for a more stable exchange rate and renewed investor confidence.
