Nigeria’s external reserves have risen to $53.11 billion, bringing the country close to the record level recorded in January 2009.

Data from the Central Bank of Nigeria showed that the reserves stood at $53.112 billion as of August 24, according to a report published by Punch.

The figure is the highest since January 12, 2009, when Nigeria’s reserves reached about $53.25 billion, according to CBN data.

The latest position leaves the country approximately $142 million below that 2009 level.

The reserves have also increased sharply since June. CBN data showed that the stockpile rose from $49.96 billion on June 3 to $53.11 billion by August 24, representing an increase of about $3.15 billion.

The buildup strengthens Nigeria’s external liquidity position and gives the central bank a larger foreign-exchange buffer.

Higher reserves can improve confidence in a country’s ability to meet external obligations and withstand external shocks. They can also provide the monetary authorities with greater room to manage legitimate foreign-exchange demand.

However, the rise in reserves should not automatically be interpreted as a guarantee of naira appreciation. Reserves are also used to meet external payment obligations and support the functioning of the foreign-exchange market.

The latest increase nevertheless marks a significant improvement in Nigeria’s external position and comes as authorities seek to strengthen confidence in the naira and foreign-exchange market.

The sustainability of the buildup will depend on continued foreign-exchange inflows and the country’s ability to manage external obligations.