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After a prolonged period of volatility, the Nigerian naira is exhibiting encouraging signs of recovery. On Wednesday, November 26, 2025, the currency appreciated against the US dollar in both official and parallel exchange markets, indicating a strengthening and more stable foreign exchange environment in Nigeria.
A Significant Step Toward Currency Stability
Data released by the Central Bank of Nigeria (CBN) revealed that the naira closed at N1,442.92 per US dollar, improving slightly from the previous day’s rate of N1,446.31. Although this N3.39 gain may appear modest, it marks a crucial phase of sustained stability that the Nigerian foreign exchange market has struggled to maintain in recent years.
When compared to other major currencies, the naira experienced a minor depreciation against the British pound but showed a slight appreciation against the euro. Despite these mixed movements, market analysts agree that the overall trend points to reduced volatility and enhanced predictability in the FX market.
CBN Governor Highlights Progress in Forex Reforms
Following the 303rd Monetary Policy Committee meeting, CBN Governor Yemi Cardoso emphasized the “notable advancements” in Nigeria’s foreign exchange reforms. A key achievement he underscored was the dramatic narrowing of the gap between official and parallel market exchange rates.
Where once the disparity reached as high as 60%, it has now been compressed to approximately 2%. This significant reduction reflects a more regulated and transparent FX market, curbing speculative activities and fostering investor confidence.
Governor Cardoso also pointed to the strengthening of Nigeria’s external reserves, which currently cover about 10 months of import needs-well above the internationally recommended threshold. This robust reserve position reassures investors of Nigeria’s ability to meet its foreign currency obligations without distress.
He further noted that daily foreign exchange transactions now average around $500 million, frequently occurring without direct intervention from the CBN, signaling a return of market confidence and liquidity.
From Turbulence to Trust Building: The Road Ahead
The governor reflected on the turbulent FX landscape of just two years ago, characterized by unpredictability that deterred investment and disrupted business operations. He expressed optimism that the current phase of reforms is guiding Nigeria through a natural recovery trajectory: establishing stability first, followed by increased investment, and ultimately, sustainable economic growth.
He conveyed a clear message that the ongoing economic reforms are beginning to bear fruit, with the naira’s gradual appreciation serving as an early indicator of positive change.
External Reserves on the Rise
Recent statistics reveal that Nigeria’s external reserves have increased by $650 million within a single week, reaching a total of $44.18 billion. Analysts at United Capital highlight that this steady accumulation of reserves over recent months has been instrumental in bolstering market confidence.
Moreover, October recorded the highest foreign exchange inflows since May, suggesting that international investors are gradually regaining trust in Nigeria’s economic policies and outlook.
A Renewed Sense of Optimism in the Forex Market
The current atmosphere in Nigeria’s foreign exchange market is notably calmer and more assured compared to the uncertainty that previously prevailed. While the naira’s recent gains may not be dramatic, they symbolize a critical rebuilding of trust within the financial system.
If this positive momentum persists, Nigeria stands to benefit from increased foreign investment, accelerated economic growth, and a more dependable currency in the long term.
The coming weeks will be pivotal in determining whether this upward trend can be sustained, but for now, the naira’s trajectory offers a hopeful outlook for many Nigerians.
