By Ola Kay
The naira closed flat ( without open trades) in the official foreign exchange (FX) market on Monday as Nigeria’s external reserves rose to $46.7 billion, supported by Eurobond issuance and the strongest FX inflows recorded in six months.
Similarly, the Naira currency held steady amid rising inflows driven by renewed foreign investor interest and recent Eurobond proceeds, which have boosted the country’s reserve position.
Details through data from the Central Bank of Nigeria, CBN, indicated that the naira depreciated marginally by 0.4 per cent, with the dollar quoted at N1,448.03 on Monday, compared with N1,442.43 on Friday at the Nigerian Foreign Exchange Market (NFEM).
However, in the parallel market, the naira appreciated slightly by N2 to close at N1,455 on Monday, from N1,457 on Friday.
The nation’s external reserves now standing at $46.7 billion has been linked directly to the federal government’s Eurobond issuance and rising FX inflows.
According to the chief executive officer of CFG Advisory, Tilewa Adebajo, “The CBN also reports that reserves have hit an eight-year high of US$46.7 billion
The apex bank noted that October 2025 marked the country’s strongest month for foreign exchange inflows since May, supported by improved macroeconomic stability and renewed appetite from offshore investors seeking opportunities in Africa’s largest economy.
Also, data from FMDQ showed that total FX inflows jumped by 91 per cent month-on-month to $6.1 billion in October, the highest since the $6.7 billion recorded in May.
Analysts have attributed this to the surge which reflects Nigeria’s increasingly attractive investment environment and strong global demand for yields.
Experts at FBNQuest Merchant Bank linked the rebound to “carry-trade opportunities” in Nigeria’s FX market amid elevated domestic interest rates. According to the firm, the combination of high local rates and recent US Federal Reserve policy easing has widened the rate differential, making Nigerian assets more appealing.
The firm said in a note on Tuesday that. “This significant carry-trade has reinforced Nigeria’s position as an attractive investment destination for offshore investors seeking higher yields.”
Investor confidence is also reflected in the 400 per cent oversubscription of Nigeria’s $2.35 billion Eurobond issued two weeks ago. The country is gaining additional positive attention from global rating agencies, with S&P Global recently revising Nigeria’s outlook from “stable” to “positive” while affirming its B-/B rating.
Another analyst from Renaissance Capital Africa, said that macroeconomic stability and highly attractive real returns are drawing investors back to local-currency debt. “Expect that their continued participation will be determined by future rate conditions and the stability of the FX.”
FMDQ data also showed that foreign investors accounted for more than half of total FX inflows during the period, rising by 161 per cent to $3.5 billion. Inflows into fixed-income securities alone reached $3.4 billion, underscoring strong demand for Nigeria’s high-yield instruments. Local participation strengthened as well, with FX contributions from individual investors rising to $602 million from $104 million in the previous month, signalling improved accessibility and deeper retail engagement.
But, despite the prospects so far, Foreign Direct Investment (FDI) inflows fell by 25 per cent month-on-month to $222 million, reflecting persistent structural challenges, including insecurity and policy uncertainty, that continue to deter long-term capital.
The FX market continues to receive strong inflows even as a larger interest rate cut looms. Despite the Monetary Policy Committee (MPC) lowering benchmark interest rates by 50 basis points to 27 per cent in September—its first cut since 2020—Nigeria still maintains one of the highest policy rates globally, making it highly attractive for foreign portfolio investors. The unusual stability of the naira, alongside continued moderation in inflation, which eased for the seventh consecutive month to 16.1 per cent in October 2025, is further boosting sentiment and could pave the way for deeper policy easing.
The FBNQuest analysts expressed the optimism that, “Despite expectations of an additional rate cut by the MPC later this month, we anticipate sustained foreign portfolio inflows, supported by attractive interest rate differentials,”
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