By David Akinmola
After more than a week of steady appreciation, the naira recorded its first minor dip on Friday, October 3, 2025, closing at ₦1,469 per dollar at the official market. Despite the slip, analysts say the local currency remains one of the strongest performers in recent weeks, buoyed by Central Bank interventions and improving investor confidence.
According to data from the Central Bank of Nigeria (CBN), the currency weakened slightly from Thursday’s ₦1,464.85 per dollar — its strongest level this year — ending an eight-day run of marginal gains. The naira had previously shown remarkable stability since September 23, when it traded at ₦1,493.20 to the dollar.
Market observers note that the mild retreat signals profit-taking and short-term corrections rather than renewed volatility. “The movement is largely technical. After such a sharp appreciation, it’s normal to see short pauses as the market adjusts,” one Lagos-based forex dealer told The Guardian.
CBN Policies Sustain Market Confidence
The naira’s resilience in recent weeks has been linked to the CBN’s sustained forex reforms and targeted liquidity management. The apex bank has intensified efforts to curb speculative trading, improve transparency in the FX window, and channel remittance inflows through official platforms.
President Bola Tinubu, in his Independence Day address, reaffirmed that the reforms were restoring credibility and stability to the foreign exchange system. “The naira has stabilised from the turbulence witnessed in 2023 and 2024. The gap between official and parallel market rates has narrowed significantly,” he said.
CBN Governor Olayemi Cardoso has also maintained that the bank’s policy direction remains focused on achieving single-digit inflation and a stronger, market-driven exchange rate.
Reserves Strengthen as Inflows Improve
Meanwhile, Nigeria’s external reserves continued their upward trajectory, rising to $42.4 billion from $42.3 billion at the end of September 2025 — their highest level in six years. The last time reserves neared this mark was in September 2019, when they stood at $41.99 billion.
The CBN attributed the steady build-up to stronger remittance inflows, improved oil earnings, and disciplined reserve management. Since mid-July 2025, the reserve position has risen consistently, signaling growing foreign investor confidence in Nigeria’s macroeconomic reforms.
Policy Outlook
The Monetary Policy Committee (MPC) in September reduced the benchmark interest rate (MPR) by 50 basis points to 27 per cent, citing moderation in inflation expectations and improved exchange rate stability. It also adjusted the asymmetric corridor around the MPR to +250/-250 basis points to improve market liquidity while maintaining a tight hold on money supply.
While President Tinubu’s 2025 budget projections — which assume an exchange rate of ₦1,500/$1 and inflation at 15 per cent — remain ambitious, analysts believe the recent currency stability and reserve build-up provide cautious optimism.
“The fundamentals are beginning to align, but sustaining this progress depends on fiscal discipline and consistent policy implementation,” said Dr. Tunde Adebayo, a financial economist at the University of Lagos.
Despite Friday’s slight retreat, traders and analysts agree that the naira’s broader trend remains positive, with continued policy support expected to keep the local currency within a stable range in the near term.
