Naira Bounces Back! Nigerian Currency Strengthens Sharply After Grey List Exit

The naira has recorded its strongest performance in 10 months, appreciating to ₦1,444.42 per dollar at the official foreign exchange market — its best level since early 2025.....KINDLY READ THE FULL STORY HERE▶

The rebound follows Nigeria’s recent removal from the Financial Action Task Force (FATF) grey list — a move analysts say has boosted investor confidence and increased dollar inflows into the economy.

Data from the Nigerian Foreign Exchange Market (NFEM), published by the Central Bank of Nigeria (CBN), showed that the naira closed October at ₦1,422/$, while the parallel market strengthened to ₦1,465/$ as traders rushed to sell off their dollar holdings.

Analysts attribute the rally to the combined effects of the CBN’s foreign exchange reforms, improved liquidity, and renewed global trust in Nigeria’s financial system after the FATF decision.

The FATF — a global anti-money laundering watchdog supported by the World Bank and IMF — announced Nigeria’s delisting on October 24, 2025, after confirming compliance with all 40 of its financial integrity benchmarks.

President of the Association of Bureaux De Change Operators of Nigeria (ABCON), Dr. Aminu Gwadabe, said the FATF’s move “has tremendously boosted confidence and eased tension in the market,” adding that the naira’s value improved by about ₦10 per dollar in just days.

CBN Hails FATF Decision

CBN Governor Olayemi Cardoso described Nigeria’s removal from the grey list as “a strong endorsement” of the country’s ongoing reforms.

“The FATF decision reflects our clear policy direction and the integrity of our financial system. Our next task is to consolidate these gains and ensure trust and transparency remain at the core of our reforms,” Cardoso said.

The apex bank noted that its reform agenda — including the unification of exchange rates, introduction of the FX Code, and adoption of the Electronic Foreign Exchange Matching System (EFEMS) — has strengthened market discipline and reduced speculative activity.

Since December 2024, when the EFEMS was introduced, the naira has appreciated by ₦216.70 — about 15 percent — from ₦1,661.12 per dollar.

Experts Credit FX Reforms and Rising Reserves

Market participants say the naira’s rally is being supported by rising foreign reserves, improved oil receipts, and stricter compliance measures.

Bureaux De Change trader Garuba Sarki told Daily Trust that speculation had declined sharply. “Many dealers are now selling below purchase rates because the market gap has narrowed. More inflows are expected to keep the naira strong,” he said.

Dr. Gwadabe added that the Nigeria FX Code has restored transparency and ethical conduct among dealers.

Head of Research at Commercio Partners, Ifeanyi Ubah, noted that the nation’s external reserves climbed to $43.1 billion as of October 28, 2025, providing stronger support for the local currency.

“With improved reserves, better oil earnings, and reduced speculation, the naira’s recovery this time looks more sustainable,” Ubah said.

Sustaining the Momentum

Experts, however, caution that maintaining stability will depend on fiscal discipline, higher crude production, and diversification of export earnings.

The FATF’s delisting is also expected to enhance Nigeria’s global financial credibility, lower international transaction costs, and attract fresh foreign investment.

As one analyst put it: “The naira’s rebound is more than a market movement — it’s a sign that Nigeria’s reputation in the global financial system has been restored.”

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