The Nigerian naira ended 2025 on a firmer footing, closing at N1,429 to the dollar on December 31, according to data from the Central Bank of Nigeria (CBN).
The year-end rate improved from N1,450.01/$ at the start of December, capping a steady recovery in the final quarter of the year.
The result marked a clear turnaround from earlier weakness. The naira opened 2025 at N1,538.50/$, close to its 2024 closing level of N1,535/$, before benefiting from foreign exchange reforms and tighter monetary policy that helped stabilise the currency.
CBN data shows that although volatility dominated much of the year, the naira’s performance strengthened significantly between September and December, signalling improving stability in the FX market.
The currency faced its heaviest pressure in the first half of 2025. In February, it traded almost flat, opening at N1,499/$ and closing at N1,500/$. March ended weaker at N1,537/$, while April marked the year’s low point, with the naira sliding sharply to N1,602/$.
A modest correction began in May, when the currency closed at N1,585/$. This was followed by a stronger rebound in June, with the naira appreciating to N1,532/$.
July recorded slight weakness, but momentum returned in August and September. By the end of September, the naira had strengthened to N1,478/$, trading below N1,500/$ for most of the month.
The rally extended into October, when the currency rose to N1,427.5/$, one of its strongest levels in 2025. November ended slightly weaker at N1,446.9/$, before the naira opened December at N1,450.01/$ and closed the year at N1,429/$.
Analysts link the late-year recovery to improved FX inflows, tighter monetary policy, and lower speculative demand.
“FX market reforms, including better price discovery and greater transparency, also supported the naira in the second half of the year,” said Ade Omotosho, an analyst at Kwik Securities.
Earlier pressures stemmed from high inflation, strong demand for dollars, and external financing constraints. Delayed FX inflows and elevated import demand also drove the sharp depreciation seen between March and April.
While the rebound does not resolve Nigeria’s structural FX challenges, the steadier performance in the final quarter suggests that policy measures began to take effect as the year progressed.
Overall, the naira’s 2025 performance points to improved stability compared with previous years, even as risks remain. Ending the year stronger than it began offers cautious optimism for 2026, especially if policy consistency holds and FX inflows continue to improve.
Analysts, however, warn that sustained gains will depend on controlling inflation, attracting long-term capital, and maintaining credibility in FX reforms. Without these, the currency could face renewed volatility despite its stronger year-end position.
The CBN has said it is finalising a revised FX manual aimed at deepening market participation, boosting transparency, and strengthening confidence in the naira.
In January 2025, the apex bank approved the Nigerian Foreign Exchange (FX) Code to promote ethical conduct and transparency in the FX market.
In its 2026 Macroeconomic Outlook, the CBN projected that Nigeria’s external reserves will rise to $51.04 billion in 2026, supported by stronger oil earnings, FX reforms, and improved external inflows.
