Year in Review: Naira Recovers Over N100 Against Dollar in 2025 as CBN Introduces 4 Key FX Policies
- The naira recovered from its chaos in the previous year as several CBN reforms begin to bear fruit
- Checks show that after early-year pressures pushing the naira beyond N1,600/$, the currency strengthened steadily and is set to close 2025 at one of its strongest level in 2 years
- Higher interest rates, better FX transparency and improved dollar inflows supported the naira strong performance
Legit.ng journalist Dave Ibemere has over a decade of experience in business journalism, with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
It has not been an easy 2025 for the naira, but it has shown resilience, reflecting the effectiveness of regulatory interventions by the Central Bank of Nigeria (CBN) and growing confidence in the foreign exchange market.
Despite periods of volatility, the naira is ending 2025 on a strong note, with a value over N100 higher than it was at the end of 2024
Source: Getty Images
How naira performed in 2025
The naira started the year trading at N1,545/$1, and there were fears that the year would be a tough one for the Nigerian currency.
Several economists predicted that the naira will fall above N1,600 in the official and black markets due to speculative demand.
To prevent the market from falling to the predicted levels, the CBN stepped in with measures like the waiver of BDC license fees and the enforcement of export proceeds repatriation, maintaining liquidity and preventing extreme swings that could have further strained ordinary Nigerians.
It worked and by March, the currency maintained relative stability, closing at N1,542/$1.
However, the naira faced its highest volatility during the period from April to June, reaching a peak of N1,615/$1 in May.
Traders during this period struggled to restock due to the high cost of foreign exchange.
Jide Alade, an electronics dealer in Ikeja, said it meant sleepless nights trying to secure dollars."
He told Legit.ng:
"It was stressful. I remember how I lived in fear, I could not order during that period because I didn't even know where the naira exchange rate would end up."
Analysts noted that the naira performance during the that period was largely influenced by global market shocks and delayed compliance with foreign exchange regulations by some exporters.
Strategic interventions, including the easing of Pan-African Payment and Settlement System (PAPSS) rules, have enhanced governance in the FX market, facilitated a recovery, with the naira closing June at N1,533/$1.
Source: Twitter
From July through September, the Naira exhibited consistent stability, trading in the ₦1,535–₦1,480/$1 range.
The introduction of the FX Code in January further reinforced transparency and adherence to ethical practices, reducing speculative pressure and enhancing market confidence.
By December, the currency had strengthened to N1,462.90/$1.
Key FX policies CBN introduced in 2025
- FX code: Institutionalized ethical practices and strengthened governance in FX transactions.
- BDC licence fee waiver: Enhanced operational liquidity for bureau de change operators.
- Export proceeds repatriation enforcement (Jan 8): Ensured timely inflows of foreign exchange.
- PAPSS rules eased: Simplified cross-border payments, particularly benefiting SMEs engaged in intra-African trade.
Other notable efforts of the CBN that helped the naira some started in 2024 and matured in 2025
- Adoption of a B-matching electronic FX trading system, making rates and transactions visible to all.
- Enabled most Nigerians to use their naira debit cards abroad
- Rising Nigerian reserves which is now at $45 billion first time in years
- Clearing of the verified FX backlog after a Deloitte forensic audit.
- Reducing the number of BDCs in Nigeria to simplify oversight
Here is the closing naira exchange rate against US dollar each month in 2025
- January: N1,499
- February: N1,504
- March: N1,542
- April: N1,603
- May: N1,589
- June: N1,533
- July: N1,535
- August: N1,535
- September: N1,480
- October: N1,434
- November: N1,449.75
- December: N1,462.9 as at Thursday, December 18
Top bank predicts dollar exchange rate in 2026
Earlier, Legit.ng reported that David Cowan, Citibank’s African economist, has projected that the naira could weaken to between N1,650 and N1,700 by mid-2026.
According to Cowan, the exchange rate next year is expected to come under pressure due to lower crude oil prices and a new monetary easing cycle.
Citi cautioned that weaker oil prices next year could weigh on Nigeria’s foreign exchange earnings and further amplify pressure on the currency.
Source: Legit.ng
