The Nigerian naira experienced a setback in the official exchange market on Wednesday, November 19, 2025, reversing gains from the previous trading session despite the country's foreign exchange reserves climbing to their highest level in seven years.
Naira Loses Ground Against US Dollar
Fresh data from the Central Bank of Nigeria revealed that the national currency depreciated to N1,454 per US dollar in the official Nigerian Foreign Exchange Market (NFEM), marking a decline from Tuesday's closing rate of N1,447. This downward movement represents a reversal from the previous session when the naira had recorded modest gains.
The parallel market mirrored this trend, with the naira also weakening to N1,465 against the American currency. This development comes as a surprise to market observers given the positive economic indicators recently announced by the Central Bank.
Foreign Reserves Surge to Seven-Year Peak
Contrasting with the naira's performance, Nigeria's foreign exchange reserves have climbed to an impressive $46.7 billion as of November 14, 2025, representing the highest level recorded in seven years. The substantial increase has been attributed to multiple factors including improved oil revenues, heightened portfolio inflows, and restored confidence among international investors.
Central Bank Governor Olayemi Cardoso, represented in Abuja by Deputy Governor for Economic Policy Muhammad Abdullahi, described the reserve position as a significant achievement within the bank's reform agenda. He emphasized that the current reserve level can cover more than 10 months of import requirements, reflecting strengthening economic conditions and growing foreign interest in Nigerian assets.
Economic Indicators Show Positive Trends
Governor Cardoso highlighted several encouraging economic developments supporting Nigeria's financial recovery. The narrowing gap between official and parallel market exchange rates, now below 2%, indicates increasing confidence in the nation's exchange-rate system according to the CBN chief.
Furthermore, Nigeria is witnessing a notable retreat in inflationary pressures. Annual headline inflation decelerated sharply to 16.05% in October 2025, down from 34.6% recorded in November 2024. This marks seven consecutive months of disinflation and represents the slowest inflation rate in three years.
Core inflation has also begun to moderate, supported by tighter monetary conditions and improved foreign exchange supply. Cardoso credited these improvements to increased crude sales, enhanced market liquidity, and policies designed to stabilize the exchange rate.
International Recognition and Economic Outlook
The CBN Governor pointed to recent international acknowledgments of Nigeria's economic progress. All three major international rating agencies have upgraded Nigeria's outlook, with S&P Global Ratings shifting the country to "positive" from "stable."
Additionally, Nigeria's removal from the Financial Action Task Force (FATF) grey list earlier this year has helped restore the nation's credibility within the international financial system, improving access to trade finance and foreign investment.
Cardoso expressed optimism that the combined effect of rising reserves, a stronger naira, slowing inflation, and improved international ratings has created a more competitive currency, enhanced trade balances, and established a stronger foundation for inclusive economic development.
Despite the day's exchange rate setback, expectations remain high for the Nigerian currency to finish the year on a strong note against other major currencies as economic reforms continue to take effect.
