The Nigerian naira appreciated against the United States dollar on Wednesday, reversing a three-day losing streak in the Nigerian Foreign Exchange Market (NFEM).
The local currency’s rebound was driven by renewed investor confidence following confirmation by FTSE Russell that foreign investors can now freely repatriate U.S. dollars from Nigeria without restriction. This development comes as liquidity improves across official FX windows.
FTSE Russell, a globally recognized index service provider, announced its intention to upgrade Nigeria’s market status from “unclassified” to “frontier” in its upcoming annual classification review. The move follows reports that the Central Bank of Nigeria (CBN) has successfully cleared FX backlogs, enabling foreign institutional investors to repatriate funds without delays.
The firm noted that Nigeria’s market status was downgraded to “unclassified” in September 2023 after foreign investors struggled to repatriate funds. However, the current reforms under the CBN’s foreign exchange liberalization policy have eliminated such barriers.
Market analysts attribute the naira’s current strength to CBN interventions and improving investor sentiment. The official rate traded below ₦1,500 per dollar after the apex bank injected $150 million into the market, supporting supply and easing pressure.
Despite early October’s strong demand for foreign currency, the naira has maintained stability, with traders citing the global weakness of the U.S. dollar index (DXY) as a contributing factor.
According to TrustBanc Financial Group Limited, the naira last traded below ₦1,500 on March 4, 2025, marking a similar occurrence six months later. During that period, CBN sold $733.9 million between March 1 and 14 to manage volatility as foreign portfolio investors exited naira assets amid global uncertainty.
The report added that unlike in the previous administration, the CBN allowed foreign investors to exit their positions freely, selling an estimated $2.75 billion within two months to support market stability.
Fresh FX data from the CBN showed the naira gained 0.03% on Wednesday to close at ₦1,470.62 per dollar at the official market, reaching an intraday high of ₦1,475. In the parallel market, the currency appreciated by 0.12% to ₦1,492 per dollar, narrowing the gap between the official and informal windows to about ₦20.
While challenges remain, analysts believe that the ongoing reforms and restored FX confidence could sustain the naira’s upward momentum in the near term.
