Nigeria’s external reserves climbed to their strongest level in six years, crossing the $42bn mark for the first time since September 2019. Latest data from the Central Bank of Nigeria show that reserves stood at $42.03bn on September 19, 2025, representing a significant rebound from earlier lows this year and providing renewed optimism for the nation’s foreign exchange stability.

The latest figure marks a new 72-month peak and underscores the steady improvement in Nigeria’s reserve position since July, when the stock fell to its lowest point in 2025. Compared with the $41.99bn recorded a day earlier, the September 19 figure reflects an increase of $40m. It also represents a substantial gain from the $41.42bn level recorded at the beginning of September.

The last time Nigeria’s reserves were higher was on September 26, 2019, when they reached $42.05bn. Since then, reserves have faced significant pressure from falling oil prices, capital flow reversals, rising import demand, and foreign exchange market interventions.

What distinguishes the current rally from past temporary spikes is its consistency. Every recorded trading session in September has seen reserves grow, with 13 consecutive daily increases across 14 reporting days.

Between September 1 and 19 alone, reserves rose by $610.8m, or 1.47 per cent, averaging about $47m in daily accretion.

The second half of the month has been particularly strong. Between September 15 and 19, reserves expanded by nearly $583m in just four business days, pointing to stronger foreign exchange inflows and a slowdown in outflows. On September 8, reserves stood at $41.57bn, but within 11 days, they had gained $461.8m.

When compared with August 29, when reserves were $41.31bn, the stock is now higher by $727.3m, representing a 1.76 per cent increase. On a year-to-date basis, reserves have grown by $1.15bn or 2.83 per cent, rising from $40.88bn at the close of 2024.

The recent performance represents a sharp turnaround from earlier in the year, when reserves slumped to $37.18bn on July 3. That level marked the lowest point in 2025 and triggered concerns over Nigeria’s ability to defend the naira or meet external obligations. Since then, however, reserves have gained $4.85bn, a recovery of about 13.05 per cent.

The latest peak not only surpasses all previous 2025 levels but also restores market confidence in Nigeria’s external buffers, which are critical for exchange rate management, investor sentiment, and debt servicing.

The return of reserves above $42bn strengthens the CBN’s ability to stabilise the foreign exchange market. It also enhances Nigeria’s import cover—a key indicator tracked by investors, lenders, and international ratings agencies. Import cover measures how many months of imports a country can finance from its reserves, and higher levels typically translate to stronger external credibility.

Economists note that the six-year high provides a psychological boost that could attract fresh portfolio inflows into local assets if policy consistency and competitive yields are sustained. In addition, the build-up eases concerns about Nigeria’s capacity to meet external obligations, including servicing debt and funding imports.

Market analysts at Cowry Assets Management described the September rally as a significant milestone that could provide stability for the naira in both official and parallel markets. In their weekly report, they projected that reserves could rise to about $45bn by the end of 2025.

“The combination of steady offshore inflows, improved oil earnings, and planned external borrowings should keep reserves on an upward trajectory in the coming months,” the analysts said. “With stronger reserves, the CBN will have greater flexibility to sustain its interventionist approach in the FX market, which in turn should help maintain the relative stability of the naira.”

However, they also warned of potential risks. “Global financial volatility, a sudden reversal in portfolio inflows, or weaker oil production could challenge the resilience of the current momentum. Nevertheless, the build-up represents a significant achievement for Nigeria at a time when many emerging markets are facing external vulnerabilities,” the analysts added.

The sustainability of the rally depends heavily on continued foreign exchange inflows from crude oil exports, non-oil revenues, diaspora remittances, and portfolio investments. Analysts caution that any slump in oil production, fall in global oil prices, or speculative pressures could dampen the momentum.

Conversely, stronger oil output, transparent FX management, and coherent fiscal-monetary coordination could consolidate the milestone and push reserves even higher. If sustained, Nigeria may not only surpass the late-2019 levels but also rebuild reserves to levels last seen in the mid-2010s, when they peaked above $45bn.

The rally in September has turned Nigeria’s 2025 reserves story from one of weakness into strength. From a low of $37.18bn in July to $42.03bn in September, the reversal demonstrates resilience in the face of earlier pressures.

Whether the momentum can be sustained into the fourth quarter will determine if the naira stabilises further and if Nigeria can maintain external stability in the long term. For now, the milestone signals a positive shift and offers a window of opportunity for policymakers to reinforce confidence in the Nigerian economy.