Nigerian Naira Appreciation Dollar: There’s some good news coming out of Nigeria’s foreign exchange market: the naira just notched its strongest level in weeks, trading at around ₦1,600.44 per dollar. It’s a sign that confidence is slowly crawling back into the country’s economic outlook.
According to data from the Central Bank of Nigeria (CBN) on Monday, May 12, 2025, the naira wrapped up the trading day at ₦1,600.44/$—a solid bump from the ₦1,606.15/$ it closed at just a week before. That’s a gain of ₦5.71, and the best we’ve seen since April 30, when the currency briefly dipped to ₦1,596.68 per dollar.
What’s driving this? A few things, really. Stronger global oil prices, a wave of foreign exchange inflows, and an uptick in investor confidence are all playing a part in lifting the currency—and, with it, hopes for a more stable financial future.
Why the Nigerian Naira Appreciation Dollar — And Why That Matters
A major factor behind the naira’s recent momentum is the improved supply of foreign exchange. In plain terms: more dollars are flowing into the system, thanks to foreign portfolio investors (FPIs) and exporters bringing in earnings. That added liquidity is helping stabilize the FX market—and giving the naira some much-needed breathing room.
Adding to the mix, there’s been a slight easing of global tensions. A temporary cooling-off in the US-China tariff standoff has softened investor nerves worldwide. As a result, many are looking beyond the "safe" dollar and shifting toward emerging markets—Nigeria included. That’s translated into renewed interest in local assets and a boost for the naira.
Oil to the Rescue — Again
Unsurprisingly, oil is still Nigeria’s heavyweight champion. A more than 1% rise in global crude prices—pushing Brent above $85 per barrel—has added a jolt of energy to the country's financial markets.
Given that oil makes up over 90% of Nigeria’s export earnings, any bump in global prices usually means a healthier trade balance and more dollars coming in. This time is no different. Investors, both foreign and local, are responding by placing renewed bets on Nigeria, increasing demand for the naira in the process.
And it’s not just vibes. The numbers back it up: Nigeria’s external reserves have ticked up past $38 billion. That gives the CBN a bit more wiggle room to manage volatility and keep confidence afloat.
But Wait—The Parallel Market Tells a Different Story
Here’s the catch: while things look rosier on the official front, the naira’s value in the parallel market hasn’t budged much. It’s still hovering around ₦1,630 per dollar. That ₦30 gap isn’t just a rounding error—it’s a reflection of deeper structural problems in the FX system.
Limited access to official FX channels and a healthy dose of speculative activity keep fueling the demand in informal markets. So, while progress is being made, the two-tier exchange rate system continues to be a thorn in the side of real reform.
So… Can the Naira Keep This Up?
Economists are cautiously optimistic. Dr. Biodun Adedipe, a respected economic analyst, says the naira is still somewhat undervalued. He believes that with steady reforms and continued dollar inflows, the currency could keep gaining ground.
But—and there’s always a but—there are still some serious headwinds. Inflation’s still a problem. Debt remains a concern. And Nigeria’s economy, for all its promise, still carries some deep structural baggage that could derail this momentum if left unchecked.
What the CBN Is Doing—and What Still Needs to Happen
Since early 2024, the Central Bank has been working overtime to clean up the FX mess. They’ve introduced reforms to unify exchange rates, cracked down on speculative trading, and made some headway in supporting non-oil exports.
Transparency has also improved—a big plus for foreign investors who don’t like surprises. And judging by the naira’s improved performance and the rising reserves, these steps are starting to pay off.
Still, experts agree that policy consistency is key. If Nigeria’s really serious about long-term currency stability, it needs to go beyond oil. That means ramping up manufacturing, diversifying exports, and reducing the economy’s dependence on crude.
Good News, But Don’t Pop the Champagne Yet
The naira’s recent appreciation is definitely encouraging. It shows that reforms, rising oil prices, and increased investor interest are finally pushing things in the right direction.
But we’re not out of the woods. The stubborn gap between official and parallel market rates and the underlying economic vulnerabilities mean that sustained stability will take time—and continued effort.
For now, though, ₦1,600/$ feels like a small win. And in a year that’s been full of economic uncertainty, small wins are worth celebrating.
