Naira Closes at N1,381/$ as External Reserves Hit $51.74bn

The naira weakened at the official foreign exchange market last week, closing at N1,381.70 to the US dollar — even as Nigeria’s external buffers strengthened to multi-year highs.

Foreign reserves climbed to $51.74 billion, the strongest level in years, giving the Central Bank of Nigeria considerably more firepower to smooth volatility in the FX market should it choose to intervene.

The divergence between a softer currency and rising reserves captures the current policy tension: the CBN has been rebuilding buffers and courting capital inflows, while demand pressure in the official window continues to weigh on the naira’s valuation.

For importers and manufacturers who price inputs in dollars, the exchange rate remains the single most watched number in the economy. For portfolio investors, the reserves trajectory is the more telling signal — a thicker cushion typically means greater confidence in the CBN’s ability to defend orderly market conditions.

The next few weeks — and the Monetary Policy Committee’s stance — will show whether the reserves build-up starts translating into firmer currency stability.

Source: The Sun