Data from the Nigerian Foreign Exchange Market (NFEM) revealed a steady weeklong uptrend that saw the naira strengthening from ₦1,452 on Monday to ₦1,444 by Wednesday before closing the week at its current level.
The positive momentum was also mirrored in the parallel market, where the currency gained consistently — moving from ₦1,490 per dollar on October 27 and 28 to ₦1,450 by October 31.
This sustained appreciation reflects growing investor confidence and the gradual impact of the Central Bank of Nigeria’s (CBN) ongoing foreign exchange reforms.
President Bola Tinubu, during his Independence Day address on October 1, had hinted at this recovery, noting that the naira had begun to regain stability after facing turbulence between 2023 and 2024. He credited the progress to recent FX reforms and the renewed inflow of capital and remittances that have narrowed the gap between official and parallel market rates.
Analysts Point to Policy Acceptance and Renewed Investor Interest
Financial analysts believe the recent surge is not accidental but rather a result of deliberate policy moves and market corrections.
Ayokunle Olubunmi, Head of Financial Institutions Ratings at Agusto & Co, told TheCable that the acceptability of the CBN’s reforms, alongside increased foreign portfolio inflows and improved oil output, has been instrumental in driving the currency’s rebound.
“The acceptability of the various reforms of the CBN and the success in attracting FPIs have significantly supported the currency,” Olubunmi explained.
“The improved inflow from higher crude oil production also helped. The naira also benefited from a weaker U.S. dollar and Nigeria’s removal from the FATF grey list, which will further strengthen investor confidence.”
However, he cautioned that the government must carefully manage its upcoming bond obligations to maintain exchange rate stability through year-end.
Improved Confidence and Reduced Speculation
For Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), the naira’s appreciation signals improving market confidence. He attributed the trend to an uptick in investor sentiment, reduced speculative demand, and declining pressure from importers.
“When investor confidence improves, foreign exchange inflows rise. At the same time, speculative demand reduces as market stability returns,” Yusuf said.
He also pointed out that Nigeria’s declining importation of petroleum products has helped ease pressure on FX demand. Furthermore, the CBN’s recent tightening of regulatory frameworks has curbed financial malpractice, improved transparency, and enhanced the credibility of the forex market.
FATF Delisting Adds to Momentum
Nigeria’s removal from the Financial Action Task Force (FATF) grey list on October 24 has also contributed to the upbeat sentiment. The FATF delisting acknowledges improvements in the country’s anti-money laundering and counter-terrorism financing systems — a move analysts say is already boosting international investor confidence.
As the naira continues to firm up against the dollar, market watchers believe sustained policy consistency, improved oil earnings, and disciplined monetary management will be key to maintaining the currency’s current trajectory.