CBN Reforms Propel Naira to 13-Year Annual Gain

The Central Bank of Nigeria (CBN) has implemented reforms that have resulted in the naira achieving its first annual appreciation in 13 years, strengthening by approximately 6.87% against the US dollar. As of January 1, 2025, the naira started the year at around N1,541 and closed at N1,435.

The CBN's measures include the launch of the Nigerian Foreign Exchange Code on January 28, 2025, aimed at promoting transparency and efficiency in interbank trade. These reforms have reversed a long trend of chronic depreciation driven by structural imbalances.

The CBN's actions have attracted substantial capital inflow, reaching nearly $21 billion in the first ten months of 2025, and have bolstered external reserves by 11%. The naira is expected to stabilize around N1,430 in 2026, assuming continued reform and favorable global conditions.

The inflation outlook for 2025 indicates a projected decline, with headline inflation expected to settle at 14%.