Naira Stability Boosts Nigeria’s FX Reserves Outlook to $41bn – Report 

‎Nigeria’s foreign exchange reserves are projected to rise to $41 billion by the end of 2025, supported by improved investor confidence, planned external borrowings, and a stronger naira. This projection, contained in a mid-year economic outlook by Lagos-based investment firm Cardinal stone, signals renewed optimism about Nigeria’s economic direction despite early-year volatility.

‎According to the report, the federal government is expected to raise about $3.2 billion in the second half of the year through external borrowings aimed at financing infrastructure and critical capital projects. This inflow, along with increased portfolio investments, is expected to boost the country’s reserves from their current level of $40.9 billion.

‎The naira, which has endured intense pressure in recent years, is forecast to maintain relative stability within the range of ₦1,550 to ₦1,635 per dollar for the rest of 2025.

Analysts attribute this stability to the Central Bank’s intervention strategies, improved reserves buffer, and an uptick in capital inflows. Despite the anticipated improvement, Nigeria’s reserves had declined by more than $3.5 billion in the first half of the year due to $2 billion in external debt repayments and foreign exchange interventions aimed at shoring up the naira amid global market disruptions.

‎The report noted that capital outflows surged during the first six months of the year as investors sought refuge in safe-haven assets due to geopolitical tensions in the Middle East and renewed trade uncertainty under the Trump administration in the U.S. These global factors triggered an estimated $22.83 billion flight to U.S. treasuries and gold, exerting further pressure on emerging markets like Nigeria.

‎However, the projected rebound in reserves is seen as a positive development for Nigeria’s macroeconomic outlook. A stronger reserve base enhances the Central Bank’s capacity to manage monetary policy, defend the naira, and stabilise inflation. Economists also believe it signals a turning point for the country’s fiscal and external position, which have come under strain in recent years due to oil market fluctuations and structural challenges.

‎As global and domestic conditions gradually align in Nigeria’s favour, the return of reserve growth and naira stability may help ease inflationary pressures, improve credit conditions, and restore investor confidence in Africa’s largest economy.