The naira has reached its strongest level in five months, trading at ₦1,497.46 per dollar at the official market on Monday, September 15, 2025, according to BusinessDay.
This marks a steady rebound from ₦1,541.36 at the start of the year, reflecting a year-to-date appreciation of about 2.9 percent.
The last time the currency was stronger was on March 4, 2025, when it closed at ₦1,491.67/$1 at the Nigerian Foreign Exchange Market (NFEM), Central Bank of Nigeria (CBN) data shows.
At the parallel market, the naira also firmed slightly, appreciating to ₦1,525/$1 from last week’s ₦1,530/$1.
Members of the Monetary Policy Committee (MPC) attributed the naira’s resilience to improved FX liquidity, rising external reserves, and reduced speculative trading.
Bala Moh’d Bello, an MPC member, noted that tighter liquidity conditions, higher investor confidence, and reforms in FX management had curtailed speculation while supporting transparency and market-based price discovery.
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Nigeria’s external reserves climbed to $40.11 billion as of July 18, 2025, equivalent to about 9.5 months of import cover, according to the CBN.
This reserve growth has been bolstered by strong diaspora remittances and foreign portfolio inflows, which Aloysius Uche Ordu, another MPC member, said were narrowing the gap between the official and parallel market rates.
Emem Usoro, deputy governor of the CBN, highlighted that higher FX turnover, alongside market reforms, had strengthened investor confidence and reduced inflationary pass-through effects.
Similarly, Mustapha Akinkunmi, another MPC member, noted that exchange rate volatility had dropped sharply—from ₦203 per dollar in 2024 to just ₦5.34 in the first half of 2025—underscoring the naira’s growing stability.
Despite global uncertainties, Nigeria’s balance of payments remains stable. Gross external reserves grew by 9 percent year-on-year, rising from $34.76 billion in June 2024 to $37.81 billion in June 2025, before climbing further to $41.66 billion by mid-September, Coronation Merchant Bank Research reported.
FX inflows, however, slipped slightly last week to $550.9 million, down from $567.2 million the previous week. Foreign portfolio investors contributed the largest share at 55.15 percent, while exporters, corporates, and diaspora remittances made up the rest. Notably, the CBN did not intervene directly in the market during the week.
With speculation waning and reserves strengthening, analysts expect the naira’s relative stability to continue over the medium term.
Image Credit: MarketForces Africa
