The naira settled at N1,455/$ at the Nigerian foreign exchange market, continuing its positive rally against the U.S. dollar.
Data from the Nigerian Foreign Exchange Market (NFEM) showed the naira trading at N1,455/$, while the unofficial black market ranged between N1,460/$ and N1,470/$.
The Nigerian currency has shown resilience against the U.S. dollar in recent weeks, contrasting with the sharp depreciations recorded earlier in 2025.
Analysts attribute the naira’s strongest gain of the year to a decline in speculative foreign exchange activities and an increase in foreign reserves to $43 billion. They note that the impact of the Central Bank of Nigeria’s (CBN) reforms continues to drive positive sentiment and confidence across markets.
Foreign investors’ interest in the domestic economy has also risen, supported by improved liquidity and adherence to FX regulations, which have helped tame the naira’s earlier sharp depreciation in both the official and parallel markets.
The CBN’s interventions with authorized dealers, significant contributions from International Oil Companies (IOCs), and inflows from Foreign Portfolio Investors (FPIs) have all contributed to stabilizing the naira. Improved market confidence, a more effective FX framework, and better macroeconomic conditions have further fueled renewed interest from FPIs in the market.
CBN Governor Yemi Cardoso recently announced that gross external reserves remained strong at $43 billion, up from $40.51 billion at the end of July 2025, with an import cover of over eight months.
“In a similar vein, the current account balance for the second quarter of 2025 recorded a significant surplus of $5.28 billion compared with $2.85 billion in the first quarter,” the CBN chief added.
U.S. Dollar Index maintains bearish momentum in global foreign exchange market
The U.S. Dollar Index (DXY), which measures the dollar’s strength against a basket of six world currencies, traded lower at about 97.9.
The final S&P Global Services PMI and U.S. ISM Services PMI reports are due. However, due to the ongoing federal government shutdown, the September Nonfarm Payrolls (NFP) report will not be released.
The shutdown began on Wednesday after a stalemated Congress failed to agree on funding. As a result, key macroeconomic releases, such as the U.S. employment report, are expected to be delayed. The shutdown is anticipated to last into the following week. The Senate is unlikely to meet this weekend, while Senate Democrats are expected to again vote against a short-term funding bill supported by the GOP.
Many federal agencies have been forced to halt non-essential tasks, with over 700,000 federal employees facing possible furloughs. Critical staff are being asked to work without pay, though the Government Employee Fair Treatment Act of 2019 guarantees that impacted workers will be compensated once funding is restored.
The Congressional Budget Office (CBO) warned that these compensations could carry significant fiscal costs.
Meanwhile, U.S. private-sector employment fell by 32,000 in September, according to Automatic Data Processing (ADP). This figure missed market expectations of 50,000 and followed a revised 3,000 decline in August, down from an earlier estimate of a 54,000 increase.
The weak data has increased expectations that the Federal Reserve (Fed) will cut interest rates twice more this year. The CME FedWatch tool indicates markets are pricing in a 90% chance of another reduction in December, along with an anticipated 25-basis-point cut at the Fed’s October meeting.
Dallas Fed President Lorie Logan said Thursday that the Fed should have lowered rates last month to cushion the labor market but noted the cooling has been gradual and that she is not in a rush to push for further cuts.
