The naira appreciated to ₦1,421.73 per dollar in October its strongest level of 2025 driven by foreign inflows and improved external reserves

The naira recorded its highest appreciation of the year at the close of October, settling at ₦1,421.73 per US dollar at the Nigerian Foreign Exchange Market, according to data released by the Central Bank of Nigeria (CBN).

Also read: Naira Strengthens Against Dollar, Hits 9-Month High

The domestic currency traded below the ₦1,500/$ threshold throughout October, gaining 3.63 per cent from ₦1,475.34/$ as of 30 September 2025. Its weakest rate during the month was ₦1,475.35/$ on 17 October, marking a period of unusual stability.

At the parallel market, the naira also firmed up, closing at ₦1,450/$ on Friday, figures from CardinalStone indicated.

Foreign inflows lift confidence

A weekly market review by AIICO Capital attributed the local currency’s strong performance to foreign portfolio investor activity, which improved dollar liquidity in the system.

“The Nigerian naira appreciated during the week, buoyed by improved foreign currency supply from foreign portfolio investors who sold USD positions, boosting market liquidity and easing demand pressures,” AIICO Capital noted.

The firm added that steady inflows and reduced demand pressure had helped sustain the naira’s appreciation, resulting in a 2.48 per cent week-on-week gain to close at ₦1,421.73 per dollar.

External reserves rise to $43.17bn

CBN data also showed that Nigeria’s external reserves climbed to $43.17 billion as of 30 October 2025, up from $42.35 billion a month earlier — a $819 million increase, or 1.93 per cent growth.

Analysts described the improvement as evidence of stronger external buffers, aided by rising foreign assets and cautious monetary management.

Dangote refinery, investor confidence support recovery

In a macroeconomic report, CSL Research pointed to the Dangote refinery’s increased production and a surplus current account as key drivers behind the naira’s resilience.

“The current account balance recorded a surplus of about $5.3bn in Q2 2025, up from $2.9bn in Q1 2025,” the firm stated, citing reduced imports and improved export receipts.

It added that the refinery’s output has lowered fuel import bills and reduced pressure on the FX market.

CSL Research also highlighted rising global investor confidence in Nigeria’s reform agenda and favourable carry trade returns, noting that offshore investors who subscribed to OMO bills in late 2024 have achieved up to 36 per cent net returns in dollar terms.

“This profitable carry trade dynamic has reinforced foreign investor interest in Nigerian assets and contributed to stability in the foreign exchange market,” the report said.

Also read: Naira Strengthens Sharply as External Reserves Rise

Economists expect the naira to remain largely stable in the near term, supported by improved liquidity, sustained CBN interventions, and stronger trade performance.