Naira Strengthens as Reserves Approach $51 Billion

The Naira has shown signs of recovery, closing at N1,368.5 in the official market by the end of February 2023, reflecting a modest appreciation from an opening rate of N1,384.5. This improvement is attributed to a rise in Nigeria's foreign reserves, which approached the Central Bank of Nigeria's (CBN) target of $51 billion, climbing to approximately $49.5 billion by February 25.

CBN Governor Olayemi Cardoso noted that the current reserve level represents the highest in 13 years, providing sufficient coverage for 15 months of imports. The reserves had previously crossed the $50 billion mark, reaching $50.45 billion.

Cardoso projected reserves to rise to $45.01 billion in 2025 and $51.04 billion in 2026, driven by stronger oil earnings, diaspora remittances, and sovereign bond issuances. The Naira's stability contrasts sharply with mid-2023's sharp depreciation due to currency reforms.

Analysts expect the Naira to trade within similar bands in the short to medium term, supported by bullish fundamentals and increased domestic refining capacity.