The Nigerian naira concluded the 2025 financial year on a remarkably strong note, recording a significant appreciation of over N100 against the United States dollar across both official and parallel foreign exchange markets. This robust performance, a welcome development for the economy, was underpinned by a substantial increase in the nation's external reserves and continued strategic interventions by the Central Bank of Nigeria (CBN).
Official and Parallel Market Performance
According to official data from the Central Bank of Nigeria, the naira appreciated by 6.96%, or N100.07, when compared to the same period in 2024. The local currency closed the final trading day of the year, Wednesday, December 31, 2025, at a rate of N1,435.75 per dollar at the Nigerian Foreign Exchange Market (NFEM).
This marked a notable improvement from its opening rate of N1,541.36 per dollar at the start of the year, translating to a full-year gain of N105.61, or 7.4%. On the last trading day alone, the naira strengthened by 0.7%, gaining N9.93 from the N1,445.68 rate quoted on Tuesday.
The positive trend was mirrored in the parallel, or black market, where the naira's performance was even more pronounced. Year-on-year, the currency appreciated by N165, or 11.1%, closing 2025 at N1,485 per dollar compared to N1,650 at the end of December 2024. From its starting point in January 2025, it gained N175, or 11.8%, strengthening from N1,660.
Key Drivers Behind the Naira's Strength
The rally was fundamentally supported by a critical boost in Nigeria's external reserves. These reserves, which provide the CBN with the firepower to stabilize the currency and manage market volatility, rose to $45.48 billion as of December 30, 2025. This represented a healthy increase from the $40.88 billion recorded in the previous year, enabling more effective market interventions.
Economic analyst Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), highlighted exchange-rate stability as one of the standout economic achievements of 2025. He noted that the naira generally traded within a band of N1,440 to N1,500 per dollar throughout the year.
"Improved stability helped reduce imported inflation pressures and made pricing, contracting, and investment planning more predictable," Yusuf stated, adding that this consistency has been crucial in boosting business confidence across various sectors.
Monthly Breakdown of Naira's 2025 Forex Journey
The path to year-end gains was not without fluctuations. Below is a monthly snapshot of the naira's average performance against the dollar in the official market during 2025:
- January: N1538.5
- February: N1500
- March: N1537
- April: N1429
- May: N1605
- June: N1532
- July: N1527
- August: N1535.5
- September: N1478
- October: N1427.5
- November: N1446.9
- December: N1429
CBN's Outlook for a Stable 2026
Looking ahead, the Central Bank of Nigeria has projected a more stable and resilient economic environment for 2026. In its 2026 Macroeconomic Outlook report, themed "Consolidating Macroeconomic Stability amid Global Uncertainty," the apex bank expressed optimism for continued naira stability.
The CBN attributed this positive expectation to the impact of reforms initiated since 2023 and improved macroeconomic coordination. The report reviews economic developments in 2025 and outlines key policy priorities intended to mitigate emerging risks and sustain the gains achieved in the foreign exchange market.
This projection offers a hopeful signal for businesses, investors, and the general public, suggesting that the policies driving the naira's 2025 appreciation are expected to yield further stability in the new year.
