Nigeria’s foreign exchange reserves have reached a new high of $34.7 billion, according to data released by the Central Bank of Nigeria (CBN) on Sunday, marking a significant increase of $110 million from the previous day and a total gain of $316 million since the beginning of July.

This growth is attributed to several factors, including rising oil prices, improved diaspora remittances, and the CBN’s efforts to stabilize the currency.

Experts view the increase in foreign exchange reserves as a positive development for Nigeria’s economy, providing a cushion against external shocks and supporting the country’s ability to meet its financial obligations.

Fitch Ratings recently upgraded Nigeria’s economic outlook to positive, citing significant reforms that have restored macroeconomic stability and enhanced policy coherence and credibility.

Fitch stated, “The positive outlook partly reflects reforms over the last year, which have reduced distortions stemming from previous unconventional monetary and exchange rate policies.”

The CBN has implemented various measures to manage the foreign exchange market, including the introduction of the Investors’ and Exporters’ window, which has attracted foreign investment and boosted reserves.

These reforms have led to a return of sizeable inflows to the official foreign exchange market and a significant rise in foreign portfolio investment inflows.

However, Fitch noted that short-term challenges remain, including high inflation and FX market volatility. Despite this, the agency expects further monetary policy tightening and strengthening of monetary policy transmission.

“The reforms have contributed to the restoration of macroeconomic stability and enhanced policy coherence and credibility. However, we see significant short-term challenges, notably high inflation, and the FX market has yet to stabilize, and the durability of the commitment to reform is to be tested,” Fitch stated.