Naira Reaches 2025 Peak at N1,421/$ Amid Rising Forex Inflows

The Nigerian naira strengthened significantly in the foreign exchange market, hitting a 2025 peak of N1,421 per dollar on Friday, driven by a surge in foreign exchange supply and renewed investor confidence. This marks the highest value the local currency has attained this year, reflecting the Central Bank of Nigeria’s (CBN) sustained interventions and improving dollar inflows into the economy.

According to traders, the appreciation was largely supported by increased foreign exchange liquidity in both the official and parallel markets, as well as rising remittances and export earnings. Data from the FMDQ Securities Exchange showed that the naira closed at N1,421/$1 at the official window, gaining from N1,440 the previous day.

Market analysts attributed the rally to a combination of factors, including the Central Bank’s aggressive efforts to clear foreign exchange backlogs, measures to curb speculative trading, and improved confidence among foreign portfolio investors. The recent inflow of capital through foreign direct investment (FDI) and portfolio inflows has also bolstered the local currency.

In the parallel market, the naira traded within a similar range, with traders noting increased supply from exporters and licensed Bureau De Change (BDC) operators. One trader in Lagos, Abdullahi Musa, said, “There’s been more dollar supply in the last two weeks. Exporters are selling more, and the Central Bank’s new reforms are working.”

CBN Governor, Dr. Olayemi Cardoso, had earlier assured that the apex bank was committed to ensuring exchange rate stability and improving transparency in the forex market. He stated that recent reforms, including unifying exchange rates and streamlining the operations of BDCs, were aimed at restoring confidence in the market and attracting more inflows.

Cardoso noted that the reforms have started yielding positive results, as seen in the improved liquidity and the naira’s performance across forex windows. “Our objective is a stable, market-driven exchange rate that reflects the true value of the naira while ensuring economic growth,” he said.

Analysts believe that the recent appreciation is a reflection of improved confidence in Nigeria’s macroeconomic management. The country has seen rising oil revenues, higher non-oil exports, and a recovery in diaspora remittances, all contributing to stronger forex reserves.

The Central Bank’s data indicated that foreign reserves rose to about $36.4 billion, providing the regulator with more room to support the local currency when necessary. The rise in reserves was partly due to the sustained rebound in global oil prices, which climbed above $88 per barrel, and renewed interest in Nigerian assets by foreign investors.

Economists, however, cautioned that while the recent gains are encouraging, sustaining the naira’s strength would require consistent reforms and careful management of inflationary pressures. Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), said the CBN must remain vigilant to maintain liquidity and curb speculative attacks on the currency.

“The appreciation of the naira is a positive development, but the CBN must ensure that the underlying fundamentals — such as productivity, export diversification, and investor confidence — continue to improve,” Yusuf advised.

The naira’s rebound has also brought some relief to importers and manufacturers who rely heavily on foreign exchange for raw materials and equipment. With a stronger currency, import costs are expected to ease, potentially reducing inflationary pressures in the coming months.

Nigeria’s inflation rate currently stands at about 27.6%, according to the National Bureau of Statistics (NBS), driven mainly by food prices and transport costs. Analysts say a stronger naira could help moderate the cost of imported goods, though structural issues like high logistics costs and energy prices remain challenges.

In addition to forex reforms, the Federal Government’s ongoing fiscal measures — including revenue diversification and support for local production — are expected to complement the CBN’s monetary initiatives. The Finance Minister and Coordinating Minister of the Economy, Wale Edun, recently stated that the government’s priority remains achieving macroeconomic stability and a competitive exchange rate environment.

He affirmed that the government’s collaboration with the private sector and international financial institutions would ensure a steady flow of capital into Nigeria’s economy. “We are working to create a system where investors can bring in their funds confidently and repatriate them without restrictions,” Edun said.

Meanwhile, traders in the forex market expressed optimism that the naira could maintain its current momentum if the positive trends continue. They pointed out that increased export receipts and remittances during the festive season could further strengthen the currency.

As Nigeria continues to attract global attention with its ongoing financial reforms, the naira’s recent appreciation serves as a positive signal for both local and foreign investors. While experts urge caution and policy consistency, the latest developments mark a significant step toward restoring stability and confidence in the country’s foreign exchange landscape.