Before the naira floated in June 2023, the official exchange rate was around ₦420-₦460 per US dollar on the Investors and Exporters (I&E) window, administered by the Central Bank of Nigeria (CBN).
However, the parallel (black market) rate was substantially higher, often between ₦750 and ₦780 per dollar, indicating a significant difference between the official and real market values.
By February 2024, BusinessDay reported that the price of one dollar was closing in on N2,000/$1 as it reached an all-time low of N1,900 on the black market.
However, a current report by the Punch showed that the Naira has hit a mark not seen in almost a year.
At the official market, the currency remained stable throughout October, trading below the 1,500/$ threshold.
On the 17th of the month, the naira hit its lowest value of the month at 1,475.35/$. Currently, it stands at an even higher value, trading for 1,421.73 per dollar.
According to CardinalStone, the domestic currency closed Friday at N1,450.00 per dollar, demonstrating that the situation at the parallel market was not all that different.
“The Nigerian naira appreciated during the week, buoyed by improved foreign currency supply from foreign portfolio investors who sold USD positions, boosting market liquidity and easing demand pressures,” said AIICO Capital, a financial services company in the West African country.
“The steady inflow of foreign funds strengthened supply conditions across key benchmarks, resulting in a consistent appreciation of the naira as USD availability outpaced demand. Overall, the naira gained 2.48 per cent week-on-week to close at N1,421.73/$,” AIICO Capital added.
Alongside the appreciation of the country’s currency, its foreign reserves have also recorded growth
Data from Nigeria’s central bank showed that the foreign reserves climbed to $43.17 billion as of October 30, 2025, from $42.35 billion on September 30, 2025.
According to CSL Research’s macro study, Dangote Refinery’s growing output helped stabilize the naira.
CSL Research’s macro note on the Dangote Refinery and the Naira
“A key driver behind this performance has been the resilience of the external sector, even amid relatively weak global oil prices. According to recent data, the current account balance recorded a surplus of about $5.3bn in Q2 2025, up from $2.9bn in Q1 2025,” the note detailed.
“We attribute this improvement to a sharp contraction in imports and a modest increase in export receipts. The narrowing of the import bill has helped reduce foreign exchange demand pressures, creating room for the naira to strengthen. We believe that one of the major contributors to this trend is the increase in domestic refined petroleum output, primarily driven by the Dangote refinery,” it added.
The challenge posed by global institutional investors with long-term, unhedged naira exposures was also highlighted by the group.
“We estimate that offshore investors who subscribed to one-year OMO bills in late 2024, when stop rates averaged around 24 per cent and the exchange rate was roughly N1,650/$, would be realising a net return of about 36 per cent in US dollar terms at current exchange rates,” it continued.
“This profitable carry trade dynamic has reinforced foreign investor interest in Nigerian assets and contributed to stability in the foreign exchange market.
Lastly, we add that sustained interventions by the CBN amid increased offshore inflows and stronger trade balances have also helped support the local currency’s performance,” CSL Research concluded.
