Naira Gains N2.75 in May as External Reserves Near $50 Billion Mark
By Aboki Forex —
The naira defied market volatility in May, gaining N2.75 against the dollar. This comes as Nigeria’s external reserves hit $49.26 billion, approaching the $50 billion threshold.
External reserves serve as a critical buffer against external shocks. They help the country meet international obligations, stabilise the domestic currency, and reassure foreign investors. The steady increase in reserves over recent months is expected to strengthen the Central Bank of Nigeria’s ability to support market stability while maintaining adequate foreign currency liquidity.
In the oil market, Brent crude front-month futures traded largely flat at $93.84 per barrel early on Friday. The U.S. benchmark West Texas Intermediate slipped 0.12 per cent to $88.94 per barrel. At the time of writing, Brent crude had declined further by 1.74 per cent to $92.08, while WTI fell 1.52 per cent to $87.55.
Chief Economist at SPM Professional, Paul Alaje, attributed the naira’s gain to improving liquidity conditions in the official foreign exchange market. He said policy measures aimed at enhancing transparency and deepening market activity have helped narrow distortions and encouraged greater participation from foreign investors.
With reserves now at $49.26 billion, attention is turning to whether Nigeria can cross the $50 billion mark in the coming weeks. If the current pace of accumulation is maintained, the milestone could reinforce confidence in the foreign exchange market and signal continued progress in rebuilding external buffers.