Naira Begins December Strongly Against USD as CBN Issues New FX Rates to Access, UBA, Other Dealers
- The Nigerian currency rebounded strongly against the dollar in the first day of December after a brief decline
- The naira’s recovery was boosted by stronger reserves and interventions by the Central Bank of Nigeria (CBN)
- Experts have predicted a stronger naira as the year draws to an end and investor confidence rebounds
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Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
The naira began December on a positive note, extending the upward momentum built in recent weeks at the official foreign exchange window.
The currency closed the week at N1,446.74 per dollar, appreciating by 0.69% from the previous week’s close of N1,456.72 after a period of sharp volatility driven by mixed market sentiments.
Source: Getty Images
This came after a period of sharp volatility triggered by fluctuating market sentiments and pressures at both ends of the FX market.
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FX inflows boost confidence as reforms take hold
For most of the week, the currency traded below N1,450 per dollar at the official window.
In the parallel market, the naira held steady with only a marginal change, closing at N1,476 per dollar.
The calmer market mood followed renewed liquidity and higher FX availability, driven in part by foreign capital inflows and a stable policy direction from the Central Bank of Nigeria (CBN).
The Governor of the CBN, Olayemi Cardoso, referenced growing investor confidence in the Nigerian economy at the 60th Annual Bankers’ Dinner in Lagos.
He noted that foreign capital inflows hit $20.98 billion between January and October 2025.
This represents a 70 percent rise above the total inflows recorded in 2024 and a massive 428 percent increase compared to the $3.9 billion seen in 2023.
Market analysts say the performance reflects more balanced trading conditions.
According to Cowry Asset Management, liquidity has improved, bid/offer spreads have narrowed and pricing in the FX market has become more stable.
The CBN’s reinforcement of the willing-buyer, willing-seller model also helped reduce uncertainty and signaled that exchange rates will continue to reflect true market conditions.
AIICO Capital analysts added that the stronger performance of the naira last week was supported by foreign portfolio investors who increased dollar sales in the market and improved liquidity.
Their report stated that the naira appreciated by N9.98 during the week as dollar availability exceeded demand, creating sustained support for the currency.
Reforms secure a steadier FX market
According to a report by Punch, Cardoso highlighted key reforms introduced over the past year that have transformed FX trading and improved transparency.
The unification of multiple exchange windows helped clear a previously heavy backlog, restoring confidence among investors and businesses planning for long-term obligations.
The introduction of the Nigerian Foreign Exchange Code and the Electronic Foreign Exchange Management System have also provided strict rules for transparency, ethics, and real-time price discovery.
According to Cardoso, these measures narrowed the gap between official and parallel markets to below 2 percent, compared to over 60 percent in the recent past.
Outlook: A more stable market ahead
Despite positive indicators, analysts say the naira may face mild pressure in the coming days due to persistent FX demand and broader economic imbalances.
However, rising external reserves and the expected boost from month-end inflows should provide a buffer.
CBN's intervention saves naira
Market conditions are also expected to remain driven by true price discovery rather than speculation, as reforms continue to anchor confidence across the system.
Source: Getty Images
A prior report by Legit.ng disclosed that the CBN intervened in the FX market, selling $36.60 million to authorised dealers.
Experts say the FX sale led to the local currency's rebound in the official window.
CBN announces $8.6bn FX turnover
Legit.ng earlier reported that this may be the best of times for Nigeria’s economy as the CBN has revealed that the country’s monthly FX turnover has risen to a new high.
According to CBN’s deputy governor, Mohammed Sani Abdullahi, Nigeria’s monthly FX turnover stands at $8.6 billion in 2025.
The CBN’s deputy governor stated this during an investors forum on the sidelines of the annual meetings of the International Monetary Fund (IMF)/World Bank in Washington, USA.
Source: Legit.ng
