Nigeria's FX reserves >$54bn, naira up, sustainability questions linger

Nigeria's foreign exchange reserves have risen above $54 billion, and the naira has gained about 7.9% against the dollar over the last nine months. In the first quarter of 2026 the country pulled in $10.37 billion of foreign capital, up 83.8% from the same period in 2025, with banks taking $7.55 billion and the financing sector $2.43 billion. January alone saw portfolio inflows of $3.37 billion, making up 95.7% of that month's total, while foreign direct investment stayed below 4%.

Experts say the rise reflects higher crude oil prices, improved oil output, lower theft, stronger diaspora remittances, growing non‑oil exports and recent FX‑market reforms. However, they warn that a large share of the inflows comes from portfolio—or hot money—investors, which can reverse quickly if global interest rates or risk appetite shift. The former Access Bank treasury official noted most of the increase appears to be from foreign portfolio investors, raising concerns about reserve sustainability and naira stability.

The persisting gap between the official and parallel exchange rates remains a worry, with calls for deeper integration of Bureaux De Change operators into the formal market to narrow the spread.

What does this mean for you? A stronger naira can lower import costs and ease inflation, but reliance on volatile hot money could bring sudden swings. Will you adjust your savings or spending plans if the naira starts to weaken again, or count on the CBN's buffers to hold?

SOURCE: https://nairametrics.com/2026/09/16/why-nigerias-forex-reserve-is-swelling/