₦airaland Forum

Naira broke a major rule in October

by Op-Ed Contributor November 3, 2025

Every October, Nigeria’s exchange rate tends to enter its storm season, a predictable cycle where the naira buckles under pressure before regaining composure towards the end of the year.

The pattern has been consistent enough to feel almost ritualistic.

In October 2022, the naira slipped from N735 to N795 per dollar at the official market before clawing its way back to N736 by December.

A year later, in 2023, it dramatically crossed the N1,000 threshold for the first time, plunging further to N1,180 by October before staging a modest recovery.

Even in 2024, with a supposedly freer exchange rate, the same script played out as the parallel market weakened from N1,700 in September to N1,750 in October, while the official rate dropped from N1,541 to N1,675 per dollar.

But this year, the script was quietly rewritten.

For the first time in years, the naira refused to follow the familiar October path of decline. Instead, it strengthened. According to Nairametrics’ currency tracker, the naira closed October 2025 at N1,427 per dollar in the parallel market, compared to N1,478 in the official market.

Even more curiously, the parallel market, which typically reacts more erratically to speculation and scarcity, appreciated slightly from N1,490 in September to N1,460 per dollar. In a country where exchange rate trends often feel like seasonal weather, this sudden calm was both surprising and telling.

The turning point appears to have come in September, when the naira broke through the N1,500 ceiling and began to build momentum. Unlike past rallies driven by temporary interventions or speculative excitement, this one seemed rooted in deeper structural and behavioural changes within the market.

Speculative demand has ebbed significantly, as fewer people are hoarding dollars. Ordinary Nigerians, financially stretched by inflation and high living costs, have little disposable income left to divert into foreign currency. Even among the political elite, the traditional dollar laundering channels have narrowed, and the new climate of scrutiny has made it safer to keep wealth in naira rather than offshore accounts.

Behind these shifts lies a broader policy reorientation at the Central Bank of Nigeria. Under Governor Olayemi Cardoso, the apex bank’s return to orthodoxy has brought a measure of credibility back to monetary management. Gone are the days of multiple exchange rate windows, opaque interventions, and unpredictable restrictions. The emphasis now seems to be on transparency, market discipline, and consistency, principles that investors and traders had long demanded but rarely received.

The results are starting to show: Nigeria’s foreign reserves have climbed to around $43 billion despite a combination of low oil prices and uninspiring crude output, a sign that confidence and portfolio inflows are quietly returning.

Institutional investors have also begun to adjust their strategies. In a high-yield environment where local currency assets now offer attractive returns, holding on to dollars looks increasingly unproductive. The opportunity cost of staying in foreign currency has risen, leading to gradual portfolio rebalancing in favor of naira-denominated investments.

Similarly, corporates that made substantial forex gains earlier in 2024 are now rushing to convert those gains before a stronger naira erodes them through mark-to-market losses. This forced conversion adds further liquidity to the domestic market and reinforces the local currency’s position.

What makes this moment significant is not merely that the naira appreciated in October, but that it defied a deeply ingrained historical pattern. For years, analysts and policymakers have treated oil prices and crude production volumes as the dominant variables in Nigeria’s exchange rate equation.

Yet, with the current free market framework and reduced policy interference, those traditional indicators seem to be losing their grip on predictive power. The market’s behavior suggests that confidence, liquidity conditions, and interest rate differentials may now carry more weight in determining currency direction than the volatile swings of the global oil market.

Of course, the situation remains delicate as Nigeria’s economy continues to face structural vulnerabilities such as stubborn inflation, fragile reserves, weak exports, and an overburdened consumer base.

A sudden policy reversal, geopolitical shock, or a collapse in investor sentiment could easily undo the recent gains.

But the fact that the naira managed to hold its ground, and even strengthen, during a period that has historically been its weakest, is a signal that something fundamental may be shifting beneath the surface.

Economists often cite the “impossible trilemma,” the idea that a country cannot simultaneously maintain a fixed exchange rate, allow free capital flows, and control its own monetary policy. The CBN seems to have made its choice: it has let go of tight exchange rate control in favor of market pricing, while using higher interest rates to attract capital inflows and stabilize the domestic market.

In this new framework, the path to currency stability lies not in defending artificial price levels, but in maintaining macroeconomic discipline and letting market confidence do the heavy lifting.

Cardoso calls this a “return to orthodoxy,” but it might well be something more transformative—a recalibration of how Nigeria’s currency finds its true value in an increasingly open and disciplined system.

If September marked the point where the naira broke a psychological ceiling, then October confirmed that the old cycle of seasonal weakness may finally be giving way to a new rhythm of resilience. The rule has been broken, and perhaps, just perhaps, a new one is being written.

peleson1:
Good one .

I must comment the economic team on this one.

They should continue to strengthen naira till it gets to less than N100 to a dollar by next year

peleson1:
Good one .

I must comment the economic team on this one.

They should continue to strengthen naira till it gets to less than N100 to a dollar by next year

peleson1:
Good one .

I must comment the economic team on this one.

They should continue to strengthen naira till it gets to less than N100 to a dollar by next year

correctguy101:
Oga, no dey deceive yasef...

This is just part of the pretence they're putting up in a bid calm oga Trump... They forget if the mad person really wants to do something, no one can stop him.

Na so I see am. How come suddenly all these good news begin flog everywhere?

Trust these people at ya own peril.

DaddyJapan:
Naira broke a major rule in October

anonimi:
World Bank offers Nigeria forex rate advice, as Tinubu eyes N200/Dollar rate

April 23, 2023

The President-elect said he would work with the Central Bank of Nigeria (CBN) to *bring down the exchange rate to N200 in his first term.*

“My administration will collaborate with the Central Bank to harmonize the fiscal and monetary policy to achieve immediate stabilization of the value of the naira against the US dollars and other currencies and in the short term, strengthen the naira by boosting the supply of foreign currency and moderating demand.

“The short-term goal is to achieve a naira/dollar rate of 300 naira/US$ and gradually achieve a less than 200 naira rate over the next four years, Tinubu stated.

https://www.ripplesnigeria.com/world-bank-offers-nigeria-forex-rate-advice-as-tinubu-eyes-n200-dollar-rate/?amp
>>>
>>>

Muhammadu Buhari, presidential candidate of the All Progressives Congress (APC), has promised to ensure that the naira would be equal to the dollar in value if voted into office.

NAN reports that Buhari said this on Monday during the south-east presidential rally of the party at Dan Anyiam Stadium, Owerri.

“It is sad that the value of the naira has dropped to more than N230 to one dollar. This does not speak well for the nation’s economy,” he said.

He urged the people to vote for APC, noting that he would ensure that corruption was tackled headlong if elected.

https://www.thecable.ng/ill-make-naira-equal-dollar-says-buhari/amp

MT:
You over exagerrate Trump too much.

So, Trump would destabilise the largest black population in the world - Do you even know what that means?

When body bags start to arrive in Washington, he will have a rethink.

EDGEof2MORO:
Nigeria refused to beg for loans as usual, instead went to sign solid deals with China and India that could potential ignore the western financial system.

All of a sudden, nigerian christians are now facing persecution and need help

this script no dey tire them

ijustdey:
Nigeria will pay an interest of 11.85 percent per annum on the $3.3 billion “pre-export finance facility” (PxF) facilitated by the Nigerian National Petroleum Company (NNPC) Ltd and arranged by Afrexim Bank, TheCable can report.

Until now, the fine details of the transaction, which has a five-year tenor, had been withheld by all parties involved.

A similar cocoa-backed $800 million facility arranged for Ghana by its cocoa marketing board attracts an interest of 8 percent per annum.

Bilateral lenders, such as the International Monetary Fund (IMF), would typically charge 1-3 percent with a longer tenor.

In the details seen by TheCable, Nigeria pledged a total of 164.25 million barrels of crude oil — at 90,000 barrels per day — starting from 2024 to repay the loan through Project Gazelle Funding Ltd, an “orphan” special purpose vehicle (SPV) incorporated in Bahamas for the PxF.

Effectively, the NNPC has pledged 38.58 percent of five years’ worth of tax and royalty oil to secure the loan.

Nigeria pledges over $12 billion worth of oil
At the beginning of 2024, a barrel of Nigerian oil was sold at the international market at $77.93 per barrel, according to the Central Bank of Nigeria (CBN) data.

At $77.93 per barrel, the 164.25 million barrels of oil pledged by Nigeria equals $12.8 billion — about three times more than the facility taken.

Pre-2014, the national oil company used to remit an average of $3 billion from oil sales every month.

Officially, Project Gazelle Funding Ltd (PGFL) is the borrower while the NNPC is the “sponsor” and will pay with oil to the SPV to liquidate the loan.

To make the repayment, the NNPC will forward-sell 90,000 barrels per day of Nigeria’s share of offshore crude oil under the production sharing contract (PSCs) with the oil companies.

Under PSCs, the companies usually pay royalties and taxes by giving the oil equivalent to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Federal Inland Revenue Service (FIRS) respectively.

The NNPC in turn exports the oil on behalf of NUPRC and FIRS and remits the proceeds to the agencies.

This is part of the revenues paid into the federation account and shared by the three tiers of government.

But under the PxF, the revenue from 90,000 barrels per day will be used to service the loan in the next five years.

The loan arrangers will get a commission of $66 million or 2% of the facility, TheCable further learnt.

Nigeria will pay 2 percent penalty per annum in the event of a default.


‘DOLLAR LIQUIDITY TO STABILISE THE NAIRA’

The national oil company announced in August 2023 that the PxF was to support the federal government “in its ongoing fiscal and monetary policy reforms aimed at stabilizing the exchange rate market”, describing it as “a relief for the naira”.

It called the facility “crude oil repayment” with an upfront cash loan “against proceeds from a limited amount of future crude oil production”.

At the time, the dollar exchanged for an average of N775 in the official market and N885 on the streets.

The rates have now moved to N1,035/$ (official) and N1,230/$ (parallel).

Nigeria’s outstanding forex liabilities are currently thought to be over $7 billion.

In an explainer after announcing the PxF last year, the NNPC said its exposure is very limited, “covering just a fraction” of their entitlements and that “there are no sovereign guarantees tied to it”.

It said it “will also equip the Federal Government with the necessary dollar liquidity to stabilize the Naira, with limited risk”.

A strengthened naira as a result of the initiative, it said, “will lead to a reduction in fuel costs. This means that if the Naira appreciates in value, the cost of fuel will drop and further increases will be halted”.

It also ruled out subsidies, maintaining that a stronger naira “will result in lower prices from the current level, making subsidies unnecessary. The deregulation policy remains unchanged”.

Critics questioned NNPC’s involvement in getting loans to boost forex reserves when it should be concentrating its efforts on bringing in more oil revenues.

There were also questions over the decision to pledge the tax and royalty oil belonging to the entire federation to secure the loan.

Analysts also queried why the details of the deal were never made public.

https://www.thecable.ng/exclusive-nigeria-to-pay-11-85-interest-on-3-3bn-afriexim-nnpc-loan-pledges-164m-barrels-as-security/amp

FxMasterz:
Those hoarding dollars should be wise. It will be bad business if you don't sell your dollars before December.

Sell your dollars now, otherwise you'll loose massively in a few months time. Dangote already warned you!

DaddyJapan:
Naira broke a major rule in October

by Op-Ed Contributor November 3, 2025

Every October, Nigeria’s exchange rate tends to enter its storm season, a predictable cycle where the naira buckles under pressure before regaining composure towards the end of the year.

The pattern has been consistent enough to feel almost ritualistic.

In October 2022, the naira slipped from N735 to N795 per dollar at the official market before clawing its way back to N736 by December.

A year later, in 2023, it dramatically crossed the N1,000 threshold for the first time, plunging further to N1,180 by October before staging a modest recovery.

Even in 2024, with a supposedly freer exchange rate, the same script played out as the parallel market weakened from N1,700 in September to N1,750 in October, while the official rate dropped from N1,541 to N1,675 per dollar.

But this year, the script was quietly rewritten.

For the first time in years, the naira refused to follow the familiar October path of decline. Instead, it strengthened. According to Nairametrics’ currency tracker, the naira closed October 2025 at N1,427 per dollar in the parallel market, compared to N1,478 in the official market.

Even more curiously, the parallel market, which typically reacts more erratically to speculation and scarcity, appreciated slightly from N1,490 in September to N1,460 per dollar. In a country where exchange rate trends often feel like seasonal weather, this sudden calm was both surprising and telling.

The turning point appears to have come in September, when the naira broke through the N1,500 ceiling and began to build momentum. Unlike past rallies driven by temporary interventions or speculative excitement, this one seemed rooted in deeper structural and behavioural changes within the market.

Speculative demand has ebbed significantly, as fewer people are hoarding dollars. Ordinary Nigerians, financially stretched by inflation and high living costs, have little disposable income left to divert into foreign currency. Even among the political elite, the traditional dollar laundering channels have narrowed, and the new climate of scrutiny has made it safer to keep wealth in naira rather than offshore accounts.

Behind these shifts lies a broader policy reorientation at the Central Bank of Nigeria. Under Governor Olayemi Cardoso, the apex bank’s return to orthodoxy has brought a measure of credibility back to monetary management. Gone are the days of multiple exchange rate windows, opaque interventions, and unpredictable restrictions. The emphasis now seems to be on transparency, market discipline, and consistency, principles that investors and traders had long demanded but rarely received.

The results are starting to show: Nigeria’s foreign reserves have climbed to around $43 billion despite a combination of low oil prices and uninspiring crude output, a sign that confidence and portfolio inflows are quietly returning.

Institutional investors have also begun to adjust their strategies. In a high-yield environment where local currency assets now offer attractive returns, holding on to dollars looks increasingly unproductive. The opportunity cost of staying in foreign currency has risen, leading to gradual portfolio rebalancing in favor of naira-denominated investments.

Similarly, corporates that made substantial forex gains earlier in 2024 are now rushing to convert those gains before a stronger naira erodes them through mark-to-market losses. This forced conversion adds further liquidity to the domestic market and reinforces the local currency’s position.

What makes this moment significant is not merely that the naira appreciated in October, but that it defied a deeply ingrained historical pattern. For years, analysts and policymakers have treated oil prices and crude production volumes as the dominant variables in Nigeria’s exchange rate equation.

Yet, with the current free market framework and reduced policy interference, those traditional indicators seem to be losing their grip on predictive power. The market’s behavior suggests that confidence, liquidity conditions, and interest rate differentials may now carry more weight in determining currency direction than the volatile swings of the global oil market.

Of course, the situation remains delicate as Nigeria’s economy continues to face structural vulnerabilities such as stubborn inflation, fragile reserves, weak exports, and an overburdened consumer base.

A sudden policy reversal, geopolitical shock, or a collapse in investor sentiment could easily undo the recent gains.

But the fact that the naira managed to hold its ground, and even strengthen, during a period that has historically been its weakest, is a signal that something fundamental may be shifting beneath the surface.

Economists often cite the “impossible trilemma,” the idea that a country cannot simultaneously maintain a fixed exchange rate, allow free capital flows, and control its own monetary policy. The CBN seems to have made its choice: it has let go of tight exchange rate control in favor of market pricing, while using higher interest rates to attract capital inflows and stabilize the domestic market.

In this new framework, the path to currency stability lies not in defending artificial price levels, but in maintaining macroeconomic discipline and letting market confidence do the heavy lifting.

Cardoso calls this a “return to orthodoxy,” but it might well be something more transformative—a recalibration of how Nigeria’s currency finds its true value in an increasingly open and disciplined system.

If September marked the point where the naira broke a psychological ceiling, then October confirmed that the old cycle of seasonal weakness may finally be giving way to a new rhythm of resilience. The rule has been broken, and perhaps, just perhaps, a new one is being written.

peleson1:
Good one .

I must comment the economic team on this one.

They should continue to strengthen naira till it gets to less than N100 to a dollar by next year

correctguy101:
Oga, no dey deceive yasef...

This is just part of the pretence they're putting up in a bid calm oga Trump... They forget if the mad person really wants to do something, no one can stop him.

Na so I see am. How come suddenly all these good news begin flog everywhere?

Trust these people at ya own peril.

correctguy101:
Oh, so why are they all in a panic?

My guy, this nonsense of coming to fight for Christians is a lie. You should know that. So that'll tell you their true motivations are alien to the public. But those in power in this country are aware, AWARE!!

Unless, they'll have secret agreements as usual, selling their citizens, it'll happen.

anonimi:
The often cited biography titled Madame Tinubu: Merchant and King-maker, authored by Nigerian historian Oladipo Yemitan, paints her views regarding slave trading.

On one occasion, during her final sojourn in Abeokuta, she was alleged to have sold a young boy into slavery and was accused of it. When arraigned before Ogundipe Alatise over the matter, she reportedly explained: 'I have a large house-hold and I must feed them well. I need money to do that, that's why'.

— Oladipo. Yemitan, 'Madame Tinubu: Merchant and King-maker'

Another section of Yemitan's Tinubu biography, referred to as the Amadie-Ojo Affair, captures a slave trading deal gone sour in 1853 (notably after the 1852 Treaty abolishing slavery in Lagos) wherein Tinubu tells another slave trader (Domingo Martinez) that "she would rather drown the slaves [20 in number] than sell them at a discount".

https://en.m.wikipedia.org/wiki/Efunroye_Tinubu

thewinning101:
PANDORA PAPERS: Buhari visited Tinubu in corruption-tainted London villa acquired by Oyetola

Governor Oyetola, a relative of Mr Tinubu, may have sabotaged his own country by buying the exotic property as Nigeria made to seize it.

ByNicholas IbekweandTaiwo-Hassan Adebayo October 7, 2021 in Headline Stories, Pandora Papers Reading Time: 8 mins read

It was a meeting of two of Nigeria’s most influential politicians in London – President Muhammadu Buhari was visiting political kingmaker and senior member of his ruling All Progressives Congress (APC), Bola Tinubu.

In July, the presidency announced that Mr Buhari was heading to London for an education summit. The office also added that the president would also see his doctors for “medical check-up”.

Coincidentally, Mr Tinubu, who had travelled to London earlier, was also receiving treatment for an undisclosed ailment in the British capital. So, a perfect setting for both men to meet was created.

https://www.premiumtimesng.com/pandora-papers/488537-pandora-papers-buhari-visited-tinubu-in-corruption-tainted-london-villa-acquired-by-oyetola.html?tztc=1

Robnectar:
no strengthen anything,... for now $$$$ is not doing well

EDGEof2MORO:
Nigeria refused to beg for loans as usual, instead went to sign solid deals with China and India that could potential ignore the western financial system.

All of a sudden, nigerian christians are now facing persecution and need help

this script no dey tire them

TimiofAbuja:
iranu

thought was something interesting

DeLaRue:
Last week, I sold some US stocks that I have had for some time.

Even though the shares had risen in value very much, if I had put the same money in some Nigerian stocks, I would have gained even more.

Right now and for the foreseeable future, naira is a better place to keep assets than dollars.

Despite all the bad news on security, ethic conflicts etc, the Nigerian economy is on the up, and I don't see it stopping for at least 5 years and beyond, if this government remains in power.

Mr Tinubu and his team are re-engineering the Nigerian economy in an intellectual way, unlike anything we have seen before in this country.