Naira Strengthens to ₦1,421/$ — 2025 Peak Fueled by Rising Forex Supply and Investor Confidence
The Nigerian naira ended October 2025 on a high note, appreciating to ₦1,421.73 per dollar — its strongest level this year — according to data from the Central Bank of Nigeria (CBN). The currency traded below ₦1,500/$ throughout October, marking a 3.63% gain from ₦1,475.34/$ recorded at the end of September. This improvement signals growing market stability and a shift toward stronger investor sentiment in Nigeria’s foreign exchange market.
Similar momentum was observed in the parallel market, where the naira closed at ₦1,450/$ on Friday, data from CardinalStone Research showed. Analysts say this alignment between official and parallel market rates reflects improved liquidity and lower speculative pressure, as foreign portfolio inflows increase and demand-side stress eases.
AIICO Capital attributed the naira’s appreciation to improved dollar supply from foreign portfolio investors. “The Nigerian naira appreciated during the week, buoyed by improved foreign currency supply from investors who sold USD positions,” the firm stated. This increased market liquidity, alongside the Central Bank’s steady interventions, helped strengthen supply conditions and ease demand pressures, leading to a 2.48% week-on-week gain.
Nigeria’s external reserves rose to $43.17 billion as of October 30, up from $42.35 billion a month earlier — a 1.93% increase within four weeks. The $819 million boost highlights growing confidence in the country’s macroeconomic management and expanding foreign asset buffers, supported by a surplus in the current account balance and reduced import bills.
CSL Research noted that higher output from the Dangote Refinery and renewed confidence among global investors have played key roles in the naira’s resilience. The report linked Nigeria’s improved foreign exchange stability to increased local refining capacity, stronger trade balances, and rising offshore investment in naira-denominated assets. With foreign investors earning up to 36% returns on Nigerian OMO bills, analysts expect the currency to remain stable in the coming weeks, sustaining its 2025 upward trend.
source: punch