The Nigerian naira concluded the month of July 2025 at ₦1,533.55 per dollar in the official Nigerian Foreign Exchange Market (NFEM), reflecting a slight monthly depreciation of 0.25% compared to its June close of ₦1,529.71/$. The marginal decline underscores a relatively stable month for the local currency amidst ongoing monetary reforms and foreign investor inflows.
According to the Central Bank of Nigeria (CBN), the naira experienced notable gains earlier in July, strengthening to a four-month high of ₦1,518/$ on July 14—its best level since March 14, 2025. This temporary rebound sparked optimism across the financial markets and signaled a broader trend of foreign exchange stability underpinned by targeted interventions from the apex bank.
However, following the mid-month rally, the naira settled back into a more conservative trading band, hovering between ₦1,530/$ and ₦1,535/$. Analysts attribute the narrowed volatility range to sustained CBN interventions, improved investor confidence, and an uptick in foreign exchange inflows—particularly from portfolio investments.
“The narrowing spread between the official and parallel market rates is a testament to reduced speculative trading and improved liquidity,” noted a Lagos-based forex trader. “The market is gradually aligning, which is crucial for investor confidence.”
On the parallel market, the naira slightly depreciated by 32 basis points, closing July at ₦1,545/$. Despite this, market watchers consider the fluctuation minimal, given the historical volatility of the parallel segment. Financial services firm CardinalStone confirmed the slight drop while noting that the gap between the official and parallel markets has significantly reduced in recent weeks.
A key factor supporting the naira’s resilience is the rise in Nigeria’s gross external reserves. CBN data showed that as of July 30, 2025, the country’s reserves had grown to $39.36 billion—up from $37.19 billion at the start of the month. This boost came on the heels of CBN Governor Olayemi Cardoso’s announcement earlier in the month that the reserves had temporarily exceeded $40 billion, the highest level recorded in nearly three years.
Speaking during a symposium in Abuja, Cardoso said the growth in reserves was a direct result of Nigeria’s ongoing macroeconomic reforms and restored global investor confidence. The event also marked the first anniversary of the CBN’s new management team, celebrated with the unveiling of a policy compendium titled “Promoting Stability in an Era of Economic Reforms: The Journey So Far.”
Globally, the US dollar showed renewed strength in July, recording its first monthly gain of the year. Bolstered by resilient US economic indicators and a stable monetary stance by the Federal Reserve, the greenback appreciated against major currencies, particularly the Japanese yen, with the dollar index holding steady at 99.85.
The Fed, under Chair Jerome Powell, held interest rates unchanged in July, signaling a cautious stance despite political pressures. As a result, the dollar posted a 4.4% gain for the month—its strongest performance since December 2024.
Looking ahead, analysts expect the naira to maintain relative stability in August, provided the CBN continues its liquidity support measures and macroeconomic reforms remain consistent. With external reserves improving and inflation showing early signs of easing, Nigeria could be on the path to greater currency confidence.
However, global market conditions—including potential oil price volatility and geopolitical developments—will remain key determinants in the performance of the naira over the coming months.
Key Takeaways:
Official rate: ₦1,533.55/$ (July 31), down 0.25% from June.
Parallel rate: ₦1,545/$, slight depreciation.
FX reserves: Rose to $39.36bn, briefly surpassed $40bn.
Naira hit 4-month high: ₦1,518/$ on July 14.
Dollar gains globally: Up 4.4% in July.
The month-end data signals cautious optimism for Nigeria’s monetary outlook, especially if the CBN sustains its momentum in delivering structural forex market reforms.