In a rare burst of good news for Africa’s largest economy, Nigeria’s gross dollar reserves have stormed past the $40 billion mark, the highest in seven months, firing up hopes of a stronger naira and a much needed breather for battered importers.

But behind the celebratory numbers lurks a nagging question: is this a genuine economic rebound or just a fleeting windfall riding on borrowed time?

Nigeria’s Dollar reserves rose by $2.1 billion in the month of July alone a sign that the Central Bank is seeing more dollar inflows into the economy and is intervening less in the official foreign exchange (FX) market.

Capital importation into Nigeria rose by 67.12 percent in the first quarter (Q1) of 2025 to $5.642 billion when compared to $3.376 billion recorded in Q1 2024, according to a report by the National Bureau of Statistics.

The inflow of dollars has helped boost liquidity in Nigeria’s foreign exchange market.

The average daily turnover value of Foreign Exchange (FX) traded on the official FX window hit $689m between January and June (H1) 2025, according to data from the FMDQ trading platform.

There was a total Foreign Exchange Turnover of $81.99 billion over 119 business days that made up H1, 2025.

The figures represented reporting by Dealing Member (Banks), according to the FMDQ.

The dollar naira value was largely stable in H1, averaging $1/₦1,553.51, according to the data from the FMDQ website.

Meanwhile, total dollar inflows into the official window of the Nigerian foreign exchange (FX) market rose to $26.40 billion, in the First Half (H1) of 2025, more than 80% of the 2024 Full year (FY) figure.

This strong performance was primarily driven by sustained Foreign Portfolio Investment (FPI) inflows of $8.89bn – higher than the $8.53bn received throughout 2024, data from FMDQ shows.

“This reflects growing investor confidence, supported by foreign exchange market reforms, attractive fixed income rates, enhanced policy credibility by the Central Bank of Nigeria (CBN), and a generally stable macroeconomic environment,” Meristem Securities analysts said in a ‘Half Year Outlook’ report.