(DDM) – Nigeria’s national currency, the naira, recorded a notable rebound in 2025, appreciating by nearly N100 against the United States dollar, while the country’s external reserves climbed to $45.5 billion, signalling a cautious but steady recovery after a turbulent period for the foreign exchange market.
Official data showed that the naira closed trading on December 31, 2025, at N1,435.76 to one dollar, an improvement from N1,535 recorded at the end of 2024.
This movement represents an annual appreciation of about 6.68 per cent, reversing part of the sharp depreciation that battered the currency in the previous year.
In parallel, Nigeria’s external reserves rose significantly within the same period.
Figures released as of December 30, 2025, placed the country’s foreign reserves at $45.5 billion, up from $40.9 billion a year earlier, reflecting an increase of approximately $4.6 billion or 11.05 per cent.
Economic analysts say the combined improvement in the exchange rate and reserves suggests growing stability in Nigeria’s macroeconomic environment, following a difficult 2024 in which the naira lost more than 40 per cent of its value amid foreign exchange reforms and market adjustments.
The Central Bank of Nigeria (CBN) attributed the improved performance of the currency and reserves to a combination of policy discipline, institutional reforms, and favourable global oil prices that supported government revenues and foreign inflows.
In its 2026 Economic Outlook, the apex bank explained that fiscal conditions improved during 2025 as reforms began to yield results and oil prices remained relatively stable, providing a stronger base for economic growth.
According to the CBN, enhanced foreign exchange management, tighter monetary controls, and renewed investor confidence helped to reduce volatility in the FX market, allowing the naira to regain some lost ground.
The bank noted that increased oil earnings and better coordination between fiscal and monetary authorities played a role in boosting external reserves, which serve as a critical buffer for defending the currency and meeting international obligations.
Market observers also pointed to improved diaspora remittances and a gradual return of portfolio investors as contributing factors to the rise in reserves and exchange rate stability.
Despite the gains, economists caution that the naira remains under pressure and that the recovery is still fragile.
They argue that sustaining the momentum will require consistent policy implementation, diversification of export earnings beyond crude oil, and improved productivity across key sectors of the economy.
Business groups welcomed the appreciation, noting that a more stable naira could help reduce imported inflation, ease pressure on manufacturers reliant on foreign inputs, and improve planning for businesses.
However, they stressed that ordinary Nigerians are yet to feel the full impact of the currency’s recovery, as high prices of goods and services continue to strain household incomes.
Analysts further warned that global economic uncertainties, oil price fluctuations, and domestic security challenges could still affect Nigeria’s foreign exchange outlook in the coming year.
As 2026 approaches, attention is expected to remain focused on how the CBN sustains confidence in the foreign exchange market, manages inflationary pressures, and strengthens reserves to support long-term currency stability.
For now, the nearly N100 appreciation of the naira and the rise in foreign reserves mark a rare positive turn for Nigeria’s economy after years of currency volatility, offering cautious optimism to policymakers, investors, and citizens alike.
