Stories by Seun Ibiyemi
The Naira closed the week stronger in the official foreign exchange market, appreciating by N7.10.
This rally was driven by a historic surge in foreign capital inflows, which totaled approximately $21 billion between January and October 2025 setting a new record for the country.
The currency’s performance reflects renewed investor confidence, driven by policy reforms and improving macroeconomic conditions.
Data from the Central Bank of Nigeria (CBN) showed that after Friday’s trading session, the naira traded at N1,446.74 to the dollar, up from N1,453.84 on Monday.
Despite a slight 0.2 percent dip from Thursday’s close of N1,443.90, the naira strengthened by N9.98, or 0.7 percent, compared with the corresponding Friday of the previous week.
Meanwhile, the naira marginally weakened in the parallel market, closing at N1,465 on Friday against N1,460 at the start of the week, due to short-term demand pressures.
CBN Governor Olayemi Cardoso, speaking at the Chartered Institute of Bankers of Nigeria’s (CIBN) 60th Annual Bankers’ Dinner in Lagos, confirmed that foreign capital inflows totaled $20.98 billion between January and October 2025, a 70 percent increase over 2024 and a staggering 428 percent rise from 2023.
He described the surge as a clear signal of restored investor confidence and attributed it to sustained market reforms.
“The most visible sign of renewed confidence is the transformation of the foreign exchange market,” Cardoso said.
He highlighted that the unification of multiple FX windows, previously plagued by multi-billion-dollar backlogs, has been fully achieved, restoring credibility and enabling businesses to plan with greater certainty.
The Governor also pointed to the introduction of the Nigerian Foreign Exchange Code, which set new standards for transparency, ethics, governance, and fair dealing among authorised dealers.
Additionally, the deployment of the Electronic Foreign Exchange Management System (EFEMS) powered by Bloomberg BMatch has improved trading, enabled real-time oversight, and enhanced price discovery.
“These reforms have reduced opacity, curbed manipulation, and restored discipline to the market,” he said, noting that the gap between official and parallel market rates has shrunk to under 2 percent from over 60 percent previously.
Cardoso also highlighted robust external sector growth, noting that Nigeria’s current-account balance rose by more than 85 percent to $5.28 billion in Q2 2025 from $2.85 billion in Q1. Foreign reserves climbed to $46.7 billion by mid-November the highest in nearly seven years, providing more than 10 months of forward import cover.
He emphasized that these reserves were rebuilt organically through improved market functioning, stronger non-oil exports, and rising capital inflows rather than borrowing.
Non-oil exports grew over 18 percent year-on-year, and diaspora remittances increased by about 12 percent, aided by improvements in transparency and efficiency.
Cardoso revealed that the introduction of the Non-Resident BVN is expected to deepen remittance inflows further in 2026.
Looking ahead, the CBN governor reaffirmed commitment to a flexible exchange-rate framework that balances stability with market-driven efficiency.
He added that a revised FX Manual will soon be launched to expand participation, tighten documentation standards, and enhance surveillance through EFEMS, ensuring consistent implementation of FX policies.