Nigeria’s foreign reserves jump $3.7bn in three days to 18-year high

Nigeria’s foreign exchange reserves surged by $3.73 billion in three days to $58.81 billion as of October 12, reaching their highest level in nearly 18 years and strengthening the country’s external buffer amid efforts to sustain stability in the naira.

Data from the Central Bank of Nigeria (CBN) show that reserves rose from $55.08 billion on October 9 to $58.81 billion on October 12, bringing the cumulative increase since the beginning of September to $4.91 billion, or about 9.1 per cent.

The latest balance is approaching the $58.91 billion recorded on November 19, 2008, when Nigeria’s reserves were last at a comparable level.

The sharp increase marks a further improvement in the country’s external position, following months of reserve accumulation that have supported confidence in the foreign exchange market.

However, the available data do not identify the specific inflows or transactions responsible for the latest three-day jump, making the source and sustainability of the increase important considerations for investors and policymakers.

The development comes as the CBN seeks to consolidate improvements in foreign exchange liquidity after years of currency volatility and pressure on the country’s external buffers.

Olayemi Cardoso, CBN governor, said in September that gross external reserves had reached $55.25 billion as of September 18, sufficient to cover 11.3 months of imports of goods and services. He also linked the stronger external position to easing foreign exchange pressures.

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The latest reserve balance represents a further increase from that level, although the import-cover ratio would need to be recalculated using updated trade and payment data.

Nigeria’s net foreign reserves have also climbed to a record $46 billion, from $34.8 billion at the end of December 2025, according to figures previously disclosed by Cardoso.

Net reserves account for certain foreign exchange liabilities, including obligations arising from swaps and forward contracts, offering a different measure of external liquidity from gross reserves.

For businesses, stronger reserves could improve confidence in the naira and strengthen the CBN’s capacity to manage periods of heightened demand for foreign currency.

Import-dependent manufacturers, retailers, and other businesses that rely on foreign inputs could benefit if the improvement translates into more predictable access to dollars for raw materials, machinery, and other international payments.

A stronger reserve position could also support investor confidence by improving perceptions of Nigeria’s ability to meet external obligations and withstand shocks to foreign currency earnings.

However, reserve growth alone does not guarantee a stable exchange rate or eliminate dollar shortages for businesses. Its impact will depend on the consistency of foreign exchange inflows, demand for imports, external debt obligations and the CBN’s management of liquidity in the market.

The composition of the latest increase will therefore be important in determining whether the gains represent a durable improvement in Nigeria’s external position.

The reserve milestone also comes after the CBN cut its benchmark Monetary Policy Rate by 350 basis points to 23 percent at its September meeting, from 26.5 percent previously, as monetary authorities adjusted policy amid improving economic conditions.

Sustaining reserve accumulation while ensuring that foreign exchange liquidity improves for businesses will be a key test of whether the stronger external position can translate into broader economic gains.