The naira climbed to a six-month high of ₦1,514.86 to the dollar at the official foreign exchange market as stronger liquidity and rising external reserves boosted demand.
This marked its best level since March 2025, when it briefly reached ₦1,512.30.
On Thursday—the week’s final trading session because of a public holiday—the naira gained ₦6.59, or 0.4%, from the previous day’s ₦1,521.45, according to Central Bank of Nigeria (CBN) data.
Meanwhile, traders in the parallel market kept rates steady at ₦1,535 per dollar, while GTBank offered ₦1,533 for international transactions, down slightly from ₦1,534 on Wednesday.
Rising Reserves And Inflows
At the same time, Nigeria’s foreign reserves slipped to $41.30 billion on September 4 from a four-year high of $41.49 billion the previous day.
Despite that dip, inflows remained strong: investors channelled $29 billion into the economy in Q1 2025, up 4% from the previous quarter and 26% year-on-year, as the CBN’s tight monetary policies attracted capital.
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However, outflows accelerated faster.
They jumped 14% quarter-on-quarter and 33% year-on-year to $13.8 billion, the highest since mid-2020, which reduced net inflows to $15.2 billion from $15.8 billion in Q4 2024.
Autonomous Flows Drive Stability
Crucially, autonomous inflows drove much of the strength.
They surged to $20.7 billion in Q1—the strongest since the pandemic—as high local interest rates lured carry-trade investors and CBN reforms improved transparency.
As a result, foreign portfolio investment inflows rose 40% quarter-on-quarter and more than doubled year-on-year to $4.9 billion.
Although CBN inflows declined and debt servicing costs increased, stronger autonomous flows anchored the naira between ₦1,500 and ₦1,600 per dollar, bringing rare stability to a volatile market.
