Naira gains as external reserves hit six-year high of $43.42bn

The naira on Thursday gained slightly against the dollar in the official foreign exchange (FX) market as Nigeria’s external reserves rose to a six-year high of $43.42 billion, reflecting renewed investor confidence and improved FX inflows.

At the end of trading, the naira appreciated marginally by N1.64 or 0.1 percent, closing at N1,441.44 per dollar compared to N1,443.08 recorded on Wednesday at the Nigerian Foreign Exchange Market (NFEM), according to data published by the Central Bank of Nigeria (CBN).

However, in the parallel market, also known as the black market, the local currency weakened slightly, losing N2 to close at N1,457 per dollar as against N1,455 per dollar recorded the previous day.

Nigeria’s external reserves have been on a steady upward trajectory, reaching $43.42 billion as of November 12, 2025, the highest level since August 30, 2019, when reserves stood at $43.60 billion. The consistent build-up in reserves reflects the combined impact of improved foreign inflows, stronger oil receipts, and restored investor confidence following the country’s recent Eurobond success.

Analysts project that external reserves could rise further to a seven-year high of $46.07 billion following the successful issuance of Nigeria’s Eurobonds, which attracted an overwhelming subscription of more than $13 billion from global investors.

The Debt Management Office (DMO) confirmed that the transaction received orders exceeding $13 billion from investors across the United Kingdom, North America, Europe, Asia, and the Middle East. The 10-year $1.25 billion bond, maturing in 2036, was priced at a coupon rate of 8.6308 percent, while the 20-year $1.10 billion note, due in 2046, carried a coupon rate of 9.1297 percent. The DMO added that Nigerian investors also participated in the offer, signaling domestic confidence in the government’s ongoing economic reform agenda.

Analysts at Comercio Partners described the Eurobond issuance as a strong reaffirmation of investor confidence in Nigeria’s economy despite a tense global geopolitical environment. They noted that the inflows from the bond would strengthen external reserves, provide fiscal breathing space, and enhance Nigeria’s capacity to meet short-term external obligations.

However, they also cautioned that the additional borrowing increases exposure to foreign exchange risks and raises the country’s interest payment obligations in hard currency.

They further explained that the Central Bank’s ongoing efforts to unify the FX market and clear outstanding backlogs have temporarily restored investor confidence. Still, they emphasised that maintaining currency stability will remain crucial to consolidating the recent gains in reserves and sustaining positive investor sentiment in the months ahead.