Naira Rises at Official Market, BMATCH on Strong Net FX Reserve
The Naira rose against the US dollar in the foreign exchange markets, including electronic platform Bloomberg BMatch following the Central Bank of Nigeria (CBN) announcement that the country’s net FX reserves strengthened to highest level in three years.
According to spot FX data, the local currency unit gained N5.57 to close at $/N1,531.25 in the official market amidst sustained interventions. At BMATCH electronic platform, exchange rate clawback back to N1530, its best range in two weeks.
FX analysts said the USD/NGN pair traded within a range of $/N1,525.00 to $/N1,535.00, ultimately closing at $/N1,531.25 on the day.
In a notice, the CBN said the Nigeria’s net foreign exchange reserves (NFER) peaked to highest levels in over three years, reflecting the success of recent measures implemented by the authority to bolster its financial coffers.
According to the statement, NFER stood at US$23.11bn at the end of December 2024, marking a significant rise from US$3.99 billion at the end of 2023, US$8.19 billion in 2022, and US$14.59 billion in 2021.
The nation’s external reserves since Mr. Yemi Cardoso took office as CBN Governor have witnessed steady growth, owing to key reforms and initiatives aimed at restoring investor confidence and attracting capital inflows, which have also helped stabilised the Naira, amid significant currency devaluation, AAG Capital Limited said in a review note.
As of December 2024, the gross reserves reached US$40.88 billion, a 24.21% y/y growth from US$32.91 billion at the end of 2023. Notably, the NFER accounted for 56.5% of these gross reserves, after considering near-term liabilities such as FX forwards, securities lending, currency swaps, and outstanding contracts.
AAG Capital Limited told investors in a report that this ratio provides a reliable measure of the unencumbered foreign exchange available to meet immediate external obligations.
However, the reserves experienced a 6.2% decline year-to-date, dropping to US$38.33 billion by the end of Q1 2025, a reduction largely attributable to significant interest payments on foreign-denominated debt. Despite this, expectations remain for a gradual reserve increase in Q2 2025, supported by improved oil production and export growth.
In the parallel marker, the exchange rate closed flat at $/N1,550.00 per US dollar. Consequently, the spread between the two markets widened to 1.22% from 0.86% on Friday.
The naira appreciated 0.6% to N1,530 as of 11.15 a.m. in Lagos Wednesday, according to spot trading on BMATCH system, tracked by Bloomberg, the biggest gain since March 18 and the strongest exchange rate in almost a month.
Elsewhere, oil prices inched higher on Wednesday as investors awaited the U.S. announcement of reciprocal tariffs, raising concerns about a potential global trade war that could impact crude demand.
Brent crude futures rose 42 cents, or 0.6%, to $74.91 a barrel while WTI crude gained 53 cents, or 0.7%, to $71.73. Meanwhile, gold prices climbed toward record highs as investors sought safe-haven assets ahead of U.S. President Donald Trump’s tariff plans.
Spot gold increased 0.5% to $3,127.23 an ounce, while U.S. gold futures rose 0.7% to $3,166.30. Naira Rises at Official Market, BMATCH on Strong Net FX Reserve CBN to Open N800bn Treasury Bills for Subscription
