Naira has recorded its strongest performance in 10 months, rising to ₦1,444.42 against the United States Dollar ($) at the official market.
Naijaonpoint reports that the development comes following Nigeria’s removal from the Financial Action Task Force (FATF) grey list, a decision analysts say has triggered renewed investor confidence and stronger market inflows.
Data from the Nigerian Foreign Exchange Market (NFEM) released by the Central Bank of Nigeria (CBN) showed the local currency closed October at ₦1,422/$, while the parallel market rate appreciated to ₦1,465/$ as dollar holders rushed to offload their positions.
Market experts say the naira’s rally reflects the combined impact of CBN’s foreign exchange reforms, increased liquidity, and a renewed global perception of Nigeria’s financial integrity following its FATF delisting.
The FATF, a global watchdog supported by the World Bank and International Monetary Fund (IMF), removed Nigeria from its list of countries with high money-laundering and terrorist-financing risks on October 24, 2025, citing the country’s progress in meeting its 40 anti-financial crime recommendations.
President of the Association of Bureaux De Change Operators of Nigeria (ABCON), Dr. Aminu Gwadabe, said the FATF’s decision had significantly boosted market morale.
“The recent announcement of Nigeria’s exit from the FATF grey list has tremendously induced confidence and removed tension in the market,” Gwadabe said.
“The impacts are already reflecting plausibly as the naira appreciates against the dollar by ₦10/$.”
He added that Nigeria’s improved compliance record and financial reforms had created optimism for long-term stability in the foreign exchange market.
CBN Commends FATF Decision, Says Reform Path Is Paying Off
Reacting to the development, CBN Governor Olayemi Cardoso described the FATF’s decision as “a strong affirmation of Nigeria’s reform trajectory and the integrity of its financial system.”
“The FATF’s decision to remove Nigeria from the grey list is a strong affirmation of our reform trajectory and the growing integrity of our financial system,” Cardoso said.
“It reflects a clear policy direction and the coordinated efforts of national institutions working together to deliver sustainable, standards-based reforms. Our priority now is to consolidate these gains and ensure that compliance, innovation, and trust advance hand in hand.”
According to the CBN, the reform agenda is focused on deepening transparency, tightening anti-money laundering oversight, and aligning Nigeria’s practices with international standards to attract more investment inflows.
Naijaonpoint reports that since June 2023, the CBN’s exchange rate unification and FX reforms have helped reduce speculation, close the gap between official and parallel market rates, and rebuild confidence among investors.
The apex bank has injected liquidity into the retail forex segment, enforced tighter compliance with FX regulations, and maintained a more transparent trading platform through the Electronic Foreign Exchange Matching System (EFEMS).
The naira’s recent appreciation represents a ₦216.70 gain, about 15 per cent, compared to the ₦1,661.12/$ rate recorded in December 2024 when the EFEMS was introduced.
‘FX Code Restores Transparency and Discipline’ – Experts
Market watchers say policies like the Nigeria Foreign Exchange Code (FX Code) and EFEMS have reined in speculative activity and strengthened the currency’s position.
A Bureaux De Change trader in Lagos, Garuba Sarki, told Daily Trust that speculation had dropped significantly, forcing some dealers to sell at a loss.
“Many dealers sold below purchase rates as the exchange rate gap narrowed. This is expected to continue, especially with expected dollar inflows strengthening the naira,” Sarki said.
Gwadabe explained that the FX Code mandates transparency, ethical conduct, and accountability among market operators, helping sustain the naira’s rally.
“The FX Code is addressing market misconduct and ensuring the CBN can enforce fair standards. It has helped restore discipline and confidence,” he added.
Analysts at Commercio Partners credited the naira’s rebound to a combination of rising demand, reduced speculative trading, and stronger foreign reserves.
Head of Research at Commercio Partners, Ifeanyi Ubah, said Nigeria’s external buffers had improved, laying a foundation for more stable performance.
“Nigeria’s rising external reserves reflect a healthier external position. With reserves strengthening, speculation subsiding, and oil earnings improving, the naira’s current rally appears more sustainable than past cycles of volatility,” Daily Trust quoted Ubah as stating.
The nation’s gross foreign reserves rose to $43.10 billion as of October 28, 2025, further supporting the local currency’s resilience.
However, experts warn that sustaining the momentum will depend on macroeconomic discipline, increased oil production, and export diversification.
CBN Reforms Continue to Shape Economic Outlook
Since assuming office in October 2023, Cardoso has prioritised stabilising the foreign exchange market and rebuilding economic buffers.
When he launched the FX Code, the governor declared: “The FX Code represents a decisive step forward, setting enforceable standards for ethical conduct, transparency, and good governance in our FX market. The era of opaque practices is over.”
He warned that violations of the FX Code would attract penalties under the CBN Act 2007 and the BOFIA Act 2020.
Beyond policy measures, the CBN is also working to clear a backlog of over $7 billion in FX obligations, improve access for legitimate users, and support foreign portfolio investment inflows.
The Paris-based FATF said Nigeria’s removal from its grey list marked a major milestone in its anti-money laundering compliance and restored confidence among global financial institutions.
Other African countries, including South Africa, Mozambique, and Burkina Faso, were also removed during the latest plenary session in Paris.
The FATF report noted that of 139 countries reviewed since 2018, 86 have successfully implemented reforms and been removed from the monitoring process.
For Nigeria, the decision is expected to ease access to international banking services, reduce transaction costs, and attract more foreign investments to the country.
As one market analyst put it, “The naira’s recovery is not just a market reaction, it’s a signal that Nigeria’s credibility in the global financial system has been restored.”
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