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Naira firms as Nigeria's foreign reserves hold near an 18-year high

Gross reserves reached $55.26bn, up 28% in a year, and central bank interventions helped the naira recover after a sharp drop on October 23.

By Newsheir Staff, Newsroom

· 2 min read

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In this article
  1. The naira bounces back
  2. Why reserves are rising
  3. Not a one-way bet
  4. What it means for Nigerians

Nigeria's foreign exchange reserves have climbed to their highest level in 18 years, giving the Central Bank of Nigeria (CBN) more room to support the naira after a volatile month.

Gross external reserves stood at $55.26bn as of October 26, up 28.3 percent from $43.07bn a year earlier, according to CBN data reported by BusinessDay. CBN Governor Olayemi Cardoso has put net reserves, which exclude swap and forward obligations, at about $46bn.

The naira bounces back

The currency had a rough patch on October 23, when it closed at about ₦1,370 to the dollar on the official Nigerian Foreign Exchange Market (NFEM). Stepped-up central bank interventions then helped it recover. It gained ₦14.74, or about 1.1 percent, in a single session to ₦1,352.87, and strengthened for a third straight day on October 28 to around ₦1,349.

By October 31 the official rate was about ₦1,346.91 to the dollar, while the parallel or "black" market rate was around ₦1,385, according to WithinNigeria.

Why reserves are rising

High global oil prices are a big part of the story. Nigeria earns most of its foreign currency from crude exports, and prices have surged this year as the US-Iran war disrupted supplies through the Strait of Hormuz. Higher earnings, along with foreign investor inflows, have helped the CBN rebuild its buffers.

Larger reserves matter because they act as a cushion. They let the central bank sell dollars to calm sudden swings in the currency and reassure foreign investors that Nigeria can meet its obligations.

Not a one-way bet

Analysts caution that reserves are only one factor. Dollar demand from importers, investor confidence and oil prices all feed into the exchange rate. The "18-year high" milestone has also been reported several times since August as reserves climbed in stages, and they dipped slightly in the latest session.

A government minister warned earlier in October that bringing back fuel subsidies could push the naira as weak as ₦4,000 to the dollar, a reminder of how sensitive the currency remains to policy choices.

What it means for Nigerians

A steadier naira can ease the cost of imported goods, from food to medicine and machinery, and help slow inflation. For now, the combination of high oil revenue and active central bank management has brought some calm to a currency that has been through years of sharp devaluations.

Sources and references

  1. 1.Naira recovers N14.74 after CBN interventions as reserves hit $55.26bn — BusinessDay
  2. 2.Naira strengthens for third session after sharp October 23 depreciation — Nairametrics
  3. 3.Dollar to Naira Today, October 31, 2026 — WithinNigeria

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