Naira gains 9.16% in six months as CBN releases new exchange rates

Nigeria's naira has recorded its strongest six-month run in recent memory, appreciating 9.16% against the United States dollar at the official foreign exchange market between January and July 2025. The currency gained N147.05 over the period, moving from N1,605 per dollar to N1,457.95, according to data released by the Central Bank of Nigeria (CBN).

At the parallel market, the naira also firmed up, rising roughly 6.83%, or N110, to settle around N1,500 per dollar compared to approximately N1,610 six months prior. The narrowing spread between the two markets reflects a gradual convergence that policymakers have long targeted.

FATF delisting and CBN reforms drive investor confidence

Analysts pointed to a combination of structural reforms and improved external recognition as the primary forces behind the currency's recovery. Nigeria's removal from the Financial Action Task Force (FATF) grey list was widely cited as a turning point for market confidence.

Bismarck Rewane, Chief Executive Officer of Financial Derivatives Company, described the impact as immediate. He said: "It means a whole lot. The naira and rand have gained almost one per cent since the news. It is now N1,490 in the parallel market."

Beyond the FATF delisting, CBN Governor Olayemi Cardoso's reform agenda, which included exchange rate unification, the clearance of a foreign exchange backlog, and greater market transparency, also underpinned the improvement. Positive momentum was reinforced further when FTSE Russell placed Nigeria on its Watch List for a potential return to Frontier Market classification.

FTSE Russell upgrade and steady outlook

The 2025 FTSE Annual Equity Country Classification Review noted that global institutional investors no longer face significant delays in repatriating capital from Nigeria, a marked shift from the country's "Unclassified" status in 2023. Analysts at Cowry Assets Management said the naira is likely to hold relatively steady in the near term, supported by consistent oil receipts and a gradual build-up in external reserves, though sustained foreign exchange demand could continue to apply mild downward pressure on the currency.

CBN releases latest official exchange rates

The CBN's most recent data showed the naira trading at the following official rates against major currencies: CFA Franc at N2.40, Chinese Yuan at N203.55, Danish Krone at N210.87, Euro at N1,576.39, Japanese Yen at N8.51, Saudi Arabian Riyal at N367.42, South African Rand at N84.31, Special Drawing Rights (SDR) at N1,875.00, Swiss Franc at N1,703.27, British Pound Sterling at N1,848.18, United States Dollar at N1,379.65, and UAE Dirham at N375.64.

Earlier, Legit.ng reported that the Bank of Tanzania prohibited the use of foreign currencies, including the US dollar, for domestic payments and transactions across the country. Under the new directive, businesses and individuals must price goods and services and complete all local transactions exclusively in Tanzanian shillings, while foreigners are required to exchange their currencies through authorised banks or Bureau de Change operators.

For Nigerian businesses and consumers, the sustained naira recovery and narrowing parallel market spread suggest improving forex liquidity and reduced cost pressure on imported goods, though analysts caution that demand-side pressures remain a risk.