The Nigerian naira is enjoying a strong rebound in the foreign exchange market, buoyed by rising external reserves and consistent support from the Central Bank of Nigeria (CBN).

Data from the Nigerian Foreign Exchange Market (NFEM) shows that the naira has gained ground against the US dollar, with the greenback slipping to its lowest level in seven months. 

On Wednesday, September 3, 2025, the naira closed at N1,522 per dollar, strengthening from N1,525 the previous day. Over the past week, the local currency has gained more than N15, signaling renewed confidence among traders and investors.

CBN’s interventions show results

The CBN has been actively intervening in the market to steady the naira. Recent actions include injecting $50 million into the FX market and attracting inflows from foreign portfolio investors through its OMO auctions. 

The apex bank has also tightened oversight of the market to curb speculation, while ensuring wider access to forex for businesses and consumers.

Industry experts believe these moves are beginning to yield long-term benefits. Aminu Gwadabe, president of the Association of Bureaux de Change Operators of Nigeria (ABCON), explained that the CBN’s drive to diversify sources of forex inflows is crucial for sustaining stability. 

According to him, the combination of stronger inflows and healthy reserves will keep the naira steady in the months ahead.

Stronger reserves boost investor confidence

Nigeria’s external reserves have continued to climb, giving the CBN more room to defend the naira when necessary. Data from the apex bank shows that reserves hit $42.72 billion in mid-August before settling at $41.27 billion by the end of the month. 

This marks the highest level since late 2021. The National Bureau of Statistics (NBS) also reported capital inflows of $5.6 billion in the first quarter of 2025, with the banking sector accounting for more than half of that figure. 

Analysts at Cordros Securities predict that these rising reserves, coupled with steady inflows, will ensure a stable exchange rate environment.

Stability across official and parallel markets

The naira’s performance has not been limited to the official market. In the parallel market, the currency also appreciated, closing at about N1,540 per dollar after a weekly gain of nearly 1%. 

This convergence across markets suggests a healthier and more efficient forex system compared to previous months.

Financial experts say the combination of improved non-oil exports, stronger remittances averaging $600 million in August, and reduced incentives for currency speculation are all working in the naira’s favor.

Outlook for the naira

With Nigeria’s foreign reserves rising, inflation easing, and steady capital inflows, the outlook for the naira appears brighter. 

Many analysts believe that as long as the CBN maintains its current policies and global oil prices remain stable, the local currency will continue to hold firm against the dollar.

For now, the naira’s resilience is a welcome sign for businesses, investors, and everyday Nigerians who have endured months of volatility.