The naira appreciated against the United States (US) dollar, closing at ₦1,427.5/$1, as Nigeria’s gross external reserves climbed to $43.17 billion at the end of the month.
A review of market data from the Central Bank of Nigeria (CBN) shows that the naira closed at ₦1,427.5/$1 on Friday, October 31, from ₦1,478/$1 when it opened on Thursday, October 2, gaining ₦50.5 or appreciating by 3.42 per cent against the US greenback.
The ₦1,427.5 it closed at in October was the highest intraday trading rate the naira appreciated to against the dollar in the review month.
Similarly, the gross external reserves rose to $43.17 billion as of October 30 from $42.35 billion at the beginning of the month, representing the highest jump recorded in the review month.
“Foreign reserves now stand above $43 billion, providing more than 11 months of import cover,” CBN Governor Olayemi Cardoso told participants at the 2025 IMF/World Bank Annual Meeting, Washington, DC, United States, in October.
“This reflects improved investor confidence and renewed inflows across asset classes,” he added.
Pinnacle Daily reported that the naira broke below the ₦1,500 threshold on September 15 for the first time since early February this year and has continued strengthening against the dollar.
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The CBN has been consistent in its policy on price stability since the new administration of its governor, Olayemi Cardoso.
At its September Monetary Policy Committee (MPC) meeting, it cut the benchmark interest rate to 27 per cent for the first time in about two years and adjusted other parameters.
Cardoso noted specifically the continued stability of the foreign exchange market and its critical importance in achieving rapid disinflation, calling on banks to continue the implementation of policies that would further boost capital inflows and deepen foreign exchange liquidity.
The monthly headline inflation disclosure had dropped for the sixth consecutive time to 18.02 per cent in September.
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The sustained rally of the naira, analysts say, reflects a combination of factors, including increasing dollar inflows, enhanced CBN liquidity interventions, and investor confidence in the government’s ongoing monetary reforms.
The factors pushing the rise in external reserves include increasing dollar inflows, oil revenues, diaspora remittances, and improved investor confidence following Nigeria’s recent removal from the Financial Action Task Force (FATF) grey list.
Pinnacle Daily reported that the global watchdog on money laundering and terrorist financing exited Nigeria from the global money-laundering watchlist.
The plan to remove Nigeria from the list had been hinted at at the beginning of October.
The FATF had said Nigeria demonstrated strong political will and inter-agency collaboration in combating financial crimes over the last two years since the country was placed on the grey list.
According to the apex bank, the removal is expected to “translate into smoother trade settlements, quicker remittance inflows, and even more predictable access to foreign exchange – enhancing livelihoods, supporting enterprise growth, and deepening financial inclusion.”
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A Lagos-based financial analyst, Kitan Babajide, stated that it would lead to a combination of improved reserves, stronger inflows, and renewed policy discipline, which is clearly helping the Naira regain ground.
However, sustaining the gain will depend on maintaining fiscal prudence, ensuring transparent FX management, and accelerating structural economic reforms.
Also, a renowned economist, Dr Muda Yusuf, believes the development reflects improved regulatory oversight and could strengthen Nigeria’s macroeconomic fundamentals.
“The exit from the FATF grey list will boost FDI because of the elevated level of confidence in Nigeria. If the capital inflows improve, it will help the forex environment. Because, if perception is positive, FDI is likely to improve, all other things being equal,” he said.
With continued appreciation of the naira and rising external reserves, analysts also believe that sustained fiscal discipline, transparent foreign exchange management, and ongoing structural reforms are expected to further strengthen the local currency in the coming weeks.
Yusuf, the managing director/chief executive officer of the Centre for the Promotion of Private Enterprise (CPPE), has urged the federal government to complement the apex bank’s efforts to fully unlock growth potential for the Nigerian economy.
He had suggested that the fiscal authorities should sustain fiscal consolidation to ensure macroeconomic stability and maintain investor confidence.
He also wants the authority to prioritise critical infrastructure investment to reduce production and logistics costs, improve competitiveness, and enhance productivity.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X
