The Nigerian naira has recorded its strongest six-month performance in recent memory, appreciating 9.16% against the United States dollar at the official foreign exchange market between January and July 2025, according to data released by the Central Bank of Nigeria (CBN). The currency gained N147.05 over the period, moving from N1,605 per dollar to N1,457.95. At the parallel market, the naira also strengthened, rising approximately 6.83% or N110 to settle around N1,500 per dollar, compared to roughly N1,610 six months prior. The narrowing spread between the two markets reflects a gradual convergence that policymakers have long targeted.
Drivers of the Naira's Recovery
Analysts attributed the currency's recovery to a combination of structural reforms and improved external recognition. 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, stating: "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—including exchange rate unification, clearance of a foreign exchange backlog, and greater market transparency—also underpinned the improvement.
Positive Momentum from FTSE Russell
Positive momentum was reinforced when FTSE Russell placed Nigeria on its Watch List for a potential return to Frontier Market classification. 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 projected continued stability for the naira, 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's Latest Official Exchange Rates
The CBN's most recent data showed the naira trading at the following official rates against major currencies: CFA Franc – N2.40, Chinese Yuan – N203.55, Danish Krone – N210.87, Euro – N1,576.39, Japanese Yen – N8.51, Saudi Arabian Riyal – N367.42, South African Rand – N84.31, Special Drawing Rights (SDR) – N1,875.00, Swiss Franc – N1,703.27, British Pound Sterling – N1,848.18, United States Dollar – N1,379.65, and UAE Dirham – N375.64.
Broader Regional Context
In a related development, 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.
