Nigeria’s strengthening currency is steadily easing the cost burden of foreign currency obligations for corporates, as sustained reforms by the Central Bank of Nigeria (CBN) continue to improve liquidity conditions in the foreign exchange market.
With the naira gaining momentum, non-bank corporates and other FX users with outstanding international payment commitments are seeing a marked reduction in naira-equivalent settlement costs. Improved access to dollars and enhanced market transparency have helped stabilise pricing, particularly for firms exposed to external trade and offshore liabilities.
Market analysts note that the improved FX environment reflects the CBN’s deliberate push to deepen supply-side liquidity, a shift that has altered the risk-reward dynamics for companies and investors alike. However, the currency rebound has also narrowed the FX revaluation gains previously enjoyed by Nigerian banks, exerting pressure on earnings growth across the sector.
According to data from CardinalStone Partners Limited, the naira has appreciated by 7.5 percent so far in 2025, marking the first calendar year gain for the currency in 13 years. The development represents a significant reversal from prolonged depreciation cycles that had dominated Nigeria’s FX landscape.
At the Nigerian Foreign Exchange Market (NFEM) window on Tuesday, the naira extended its rally for a fourth straight trading session, appreciating by ₦10.24 to close at ₦1,419.07 per US dollar. Intraday trading showed the currency fluctuating within a band of ₦1,426.00 and ₦1,414.00 per dollar, underscoring improved price discovery.
Foreign Portfolio Investor (FPI) inflows were a major driver of the session’s performance, reinforcing growing offshore confidence in naira-denominated assets. Nigeria’s external reserves also recorded a marginal boost, rising by $40.75 million day-on-day to $45.61 billion.
The CBN has projected a further build-up in reserves, forecasting a rise to $51.04 billion by 2026. The outlook is anchored on continued FX market reforms, stronger capital inflows, and improved external balances, although fiscal constraints and global macroeconomic risks remain key variables to monitor.
On the global commodities front, oil prices edged lower as markets balanced expectations of abundant global supply against uncertainty surrounding Venezuelan crude flows following the United States’ capture of President Nicolas Maduro. Brent crude declined by 69 cents, or 1.12 percent, to $61.07 per barrel, while U.S. West Texas Intermediate (WTI) fell 79 cents, or 1.35 percent, to $57.53.
Gold prices, however, moved in the opposite direction, extending gains as geopolitical tensions boosted safe-haven demand. Investors also remained cautious ahead of key U.S. payroll data, which could shape expectations around the Federal Reserve’s interest rate trajectory.
Spot gold rose 0.90 percent to $4,488.72 per ounce, while U.S. gold futures advanced 1.08 percent to $4,499.50 per ounce. Analysts at AIICO Capital Limited expect precious metals to remain well-supported by a combination of risk aversion and anticipated U.S. rate cuts, while oil prices may continue to face pressure from supply-side dynamics and the potential return of Venezuelan output.
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