The naira strengthened to a six-month high of N1,514.86 per US dollar at the official foreign exchange (FX) market on Thursday, buoyed by rising market liquidity, improved FX inflows, and robust external reserves.
This marks the highest level the local currency has traded since March 6, 2025, when it appreciated to N1,512.30 per dollar, according to data from the Central Bank of Nigeria (CBN).
At the Nigerian Foreign Exchange Market (NFEM), the naira appreciated by N6.59 or 0.4 percent on Thursday, closing the week on a stronger note due to the Friday public holiday declared by the Federal Government. The naira had closed at N1,521.45 on Wednesday.
In the parallel market, the naira held firm at N1,535 per dollar, while GTBank quoted a slightly stronger rate of N1,533 for international transactions, compared to N1,534 the previous day.
Nigeria’s external reserves stood at $41.30 billion as of September 4, 2025—just shy of the four-year high of $41.49 billion recorded a day earlier.
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FX inflows into the Nigerian economy climbed 4 percent quarter-on-quarter and 26 percent year-on-year to reach $29 billion in Q1 2025. This continues a trend of improving inflows since late 2023, supported by tighter CBN monetary policy and reforms aimed at increasing transparency in the FX market.
However, FX outflows outpaced inflows, rising 14 percent q/q and 33 percent y/y to $13.8 billion, the highest since Q2 2020. Net inflows were $15.2 billion, slightly below Q4 2024 levels.
Analysts at FBNQuest attributed the rise in inflows largely to autonomous sources, which reached $20.7 billion—the highest since the pandemic—fueled by attractive interest rates and carry trade opportunities.
Foreign portfolio investment rose 40 percent q/q to $4.9 billion, while CBN-sourced inflows fell to $8.3 billion. Outflows related to external debt service hit $1.4 billion, pushing CBN-driven FX outflows to $10.5 billion.
Despite this, increased autonomous inflows continue to support exchange rate stability, keeping the naira within the N1,500–N1,600/$ band.
