The naira at the weekend recorded significant gains at both official and parallel markets as $41.07 billion gross foreign reserves bolstered the local currency.
Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso said the reserves, which are currently at four-year high, could provide up to 10 months cover for imports.
The local currency closed at N1,544 to dollar at the parallel market, stronger than N1,550 to dollar it closed on Thursday. At the official market, the naira exchanged at N1,535 to dollar, stronger than N1,540 to dollar at the start of the week.
According to data from the CBN reserves movement chart, the gross foreign reserves stood at $41.07 billion on August 21.
The reserves earlier hit $40.72 billion on August 13, driven largely by rising forex inflows and marginal increase in crude oil output.
According to the apex bank, the gross reserves moving average stood at $39.3 billion on August 1, and reached $39.5 billion on August 6, and hit $40.2 billion on August 8. The sustained reserves accretion, decline in inflation rate, commodities prices dip as well as long-term naira stability are all positive fallout of the ongoing economic reforms instituted by the Federal Government.
Aside the reserves, the naira has also seen sustained stability while the inflation rate has continued to decline, closing July at 21.88 per cent.
The July figure, represents fourth consecutive month of decline, compared with 22.22 per cent posted in June, according to figures from the National Bureau of Statistics (NBS).
The latest Consumer Price Index report showed that the July figure was 0.34 percentage points lower than the June rate and 11.52 percentage points below the 33.40 per cent recorded in July 2024.
The NBS said, “The Consumer Price Index rose to 125.9 in July 2025, reflecting a 2.5-point increase from the preceding month (123.4). In July 2025, the headline inflation rate eased to 21.88 per cent relative to the June 2025 headline inflation rate of 22.22 per cent”.
Part of the reserves accretion was triggered by the FX reforms, instituted by the Olayemi Cardoso-led CBN, new policies instituted by the Federal Government to boost local production, reduce forex demand pressure, and lessen domestic prices have been instrumental to macroeconomic stability.
The expectations are that the apex bank sustains the forex reforms while the fiscal authority strengthens efforts at enhancing FX earnings, especially from gas, oil and non-oil exports.
President, Association of Bureaux De Change Operators of Nigeria, Dr. Aminu Gwadabe, said the apex bank under Cardoso has been cultivating multiple FX sources to increase dollar inflows, boost dollar access to manufacturers and retail end users.
“From moves to improve diaspora remittances through new product development, the granting licenses to new International Money Transfer Operators (IMTOs), implementing a willing buyer-willing seller FX model, and enabling timely access to naira liquidity for IMTOs, the apex bank has simplified dollar-inflow channels for authorised dealers and other players in the value chain,” he said.
The explained that the move has led to substantial accretion to the gross FX reserves and supported the stability of the naira.
Given that FX inflows to the economy are strategic in achieving monetary and fiscal policy stability, the CBN under Cardoso puts in a lot of efforts in attracting more inflows into the economy.
Diaspora remittances to Nigeria, estimated at $23 billion annually remain a reliable source of forex to the domestic economy. There are also other sources and policies that are being explored by the apex bank to keep dollar inflows coming.
The CBN’s initiatives have supported continued growth in these inflows, aligning with the institution’s objective of doubling formal remittance receipts within a year.
The remittances in the economy is expected to increase based on CBN’s ongoing efforts to bolster public confidence in the foreign exchange market, strengthen a robust and inclusive banking system, and promote price stability, which is essential for sustained economic growth.
With improvement in exchange rate, comes reduced cost for import. Importation costs in Nigeria include various taxes and charges, primarily import duties, VAT, and other levies. These costs are calculated based on the CIF value (Cost, Insurance, and Freight) of the goods, which includes the cost of the goods, insurance, and shipping.
The cost, insurance and freight (CIF) price is the price of a good delivered at the frontier of the importing country, or the price of a service delivered to a resident, before the payment of any import duties or other taxes on imports or trade and transport margins within the country.
Changes in exchange rate can significantly impact the cost of imports, as duties and other charges are often calculated based on the prevailing exchange rate.
Nigeria’s total Imports in 2024 were valued at $40.97 billion, according to the United Nations COMTRADE database on international trade. Nigeria’s main import partners were: China, Belgium and India.
New figures from the National Bureau of Statistics (NBS) reveal that Nigerian imported food and beverages worth N1.67 trillion ($1 billion) during the first quarter of 2025 (January–March), reflecting a five per cent increase from the N1.59 trillion recorded over the same period in 2024.
