₦airaland Forum

Two weeks ago, I urgently needed forex and did what most Nigerians do in that situation: I called my supplier and prepared to negotiate like a Lagos market veteran.

He quoted N1,488/$1, which felt painful compared to the N1,421 official rate I was using as a mental reference, even though that rate is mostly theoretical for retail buyers.

After a brief internal debate about principles versus reality, I paid the N1,488 and moved on with my life.

Days later, it touched N1,490, and suddenly my purchase felt like foresight rather than surrender, because the real fear was a sprint to N1,500.

Fast forward two weeks, and the parallel market is flirting with N1,420/$1. Now I am not sure whether to congratulate myself or demand a refund from the universe.

Meanwhile, analysts are confidently projecting N1,200/$1 as a reasonable target, and billionaire investor Femi Otedola has suggested the naira could even strengthen below N1,000 on the back of domestic refining and stronger exports.

For a country that has spent over a decade adjusting to depreciation headlines, this feels almost suspiciously pleasant.

Politically, a stronger naira is irresistible because it feels like vindication, signals stability, and hints at cheaper imports and softer inflation after a reform season that has stretched wallets and patience.

Economically, however, rapid appreciation deserves a raised eyebrow, especially if it is powered more by short-term capital than by factories, farms, and actual output.

Nigeria’s recent monetary reset explains why the applause should be measured.

Over the past two years, the Central Bank under Governor Olayemi Cardoso raised benchmark interest rates aggressively, tightened liquidity, and dialled back intervention practices that had blurred price signals.

Treasury bills and bonds were issued at yields above 20 per cent, restoring a high price of money and turning Nigeria into a yield hotspot. Inflation, which peaked above 30 per cent in 2024, has eased to roughly 16 per cent, exchange rate volatility has moderated, and reserves have improved.

The medicine worked, but it also made Nigeria very attractive to global investors hunting for returns.

As developed economies cooled their own rate cycles, Nigeria’s double-digit yields began to shine.

According to data cited by the National Bureau of Statistics, about $16.7 billion flowed into Nigeria in the first nine months of 2025, yet only $565 million of that was foreign direct investment, representing just 3.3 per cent.

The rest was largely portfolio investment, which is another way of saying money that packs light and travels fast.

Portfolio capital buys bonds, not factories. It attends auctions, not factory openings. As the naira appreciates, investors who entered at weaker levels now sit on tidy currency gains in addition to generous yields.

The stronger the naira becomes, the more tempting it is to take profit and head for the airport lounge. If too many decide to leave at once, dollar demand could spike, and today’s strength could become tomorrow’s scramble.

An appreciating currency driven mainly by yield-seeking flows can therefore end up chasing its own tail.

There is also the quieter export story. Nigeria’s non-oil exports stood at about $6.4 billion in 2024 and roughly $5.7 billion in the first nine months of 2025, comfortably above levels from a decade ago but still modest for an economy of this size.

A stronger naira makes Nigerian goods more expensive abroad, and for agro-processors and manufacturers already juggling high input costs, appreciation without productivity gains squeezes margins just when diversification needs momentum.

Then there is the fiscal math. Federal export earnings arrive in dollars before conversion into naira for FAAC sharing, and a stronger exchange rate means fewer naira per dollar earned.

States that rely heavily on those allocations could find their budgets tighter even while headlines celebrate currency strength.

The Central Bank cannot keep rates elevated forever just to keep the naira looking good.

High yields defend the currency, but they also raise debt servicing costs and crowd out private credit. Yet cutting rates too quickly to engineer a weaker naira would risk reigniting inflation and undoing the painful progress households have endured.

That is the policy paradox in everyday language: strength powered by hot money is shaky, while weakness engineered carelessly is costly.

What Nigeria needs is not a naira that looks strong on paper, but one that is strong because exports are rising, foreign direct investment is deepening, and productivity is improving.

That requires clear non-oil export targets, better trade logistics, incentives that reward real capacity expansion, and regulatory certainty that attracts builders rather than traders.

Nigerians understandably want relief because inflation has slowed, but price levels remain far above where they were in 2022, and slower price increases do not feel the same as lower prices.

A stronger naira alone cannot rewind the clock if appreciation rests on capital flows rather than real output.

The real danger of an appreciating naira is confusing excitement with endurance. A currency supported by production and exports has staying power. A currency supported mainly by interest rate differentials has mood swings.

A strong naira built on factories, farms, and exporters is an economy that goes to the gym and lifts its own weight.

A strong naira built on hot money is an economy borrowing someone else’s muscles for a photo shoot. One is strength, the other is lighting. Only one still looks good when the lights go out.

Source From Nairametrics.

You peoplw have come again.

CodeTemplar:
You people have come again.

You people don't read the article.

Also, didn't know you were a tinubu supporter as well...this article criticises the government polices that have led to the appreciation.

CodeTemplar:
You peoplw have come again.

Brother you no fit satisfy human “beans”

The same man with the worse statistics now once said "na statistics we go chop?"

Keep your metriculazinizm to your self...

Biko...


U always stay positive ... That's how u survive

Yes, it's a double-edged sword. Regardless, Naira must find it's true value not manipulated value.

More and more propaganda being sprinkled on our faces.

Agbadorians will sit the whole day and think “What can I publish to hint that Tilumbu government is doing well though there’s no reality to it?”

See the carefully worded Agbadorian scent below

Meanwhile, analysts are confidently projecting N1,200/$1 as a reasonable target, and billionaire investor Femi Otedola has suggested the naira could even strengthen below N1,000 on the back of domestic refining and stronger exports.

===

See another one 👇🏾

Treasury bills and bonds were issued at yields above 20 per cent, restoring a high price of money and turning Nigeria into a yield hotspot. Inflation, which peaked above 30 per cent in 2024, has eased to roughly 16 per cent, exchange rate volatility has moderated, and reserves have improved.

The medicine worked, but it also made Nigeria very attractive to global investors hunting for returns.

Thanks for the insight.

It was a good read for me.

Naira metrics or emi mi lo kan metrics

With all due respect, this analyst is an enemy of progress.

Where were you when Naira depreciated from N400 at Buhari’s handover to N1900

Naira is appreciating but cement price is going up

Whats happening?

CodeTemplar:
You peoplw have come again.

I bet you didn't read up to 4 lines.

You just went to do your data boys' job straight from the headlines.

The Naira is appropriating and I hope it reflects on the market and goods in general.

Who is appreciating the naira? Obidients statistics ...una no de tired

They will do all this so that they will prepare nigerians mind for their failures. Nairametrics are apc agents. It's not today

China intentionally depreciates its currency for some reasons

yesloaded:
Naira is appreciating but cement price is going up

Whats happening?

It's been officially declared several decades ago that Nigeria's economy defies economic logic.

It is difficult to quantify the natural greed of an average Nigerian businessman.

For example, news of impending fuel price increase or dollar increase is enough for an immediate increase in the cost of products across Nigeria but a corresponding actual reduction in fuel price or dollar value will not reflect in cost of products due to perpetual "we are selling old stock" argument.

The writer is totally disconnected from the present economic reality. The naira is not been pushed, it is growing organically.

Na so the naira dey do, very soon e go return to factory reset 😒

Brilliant, incisive piece. Thumbs up to the writer

omoredia:
They will do all this so that they will prepare nigerians mind for their failures. Nairametrics are apc agents. It's not today

Lol, read the bolded parts of the article and then check your comment again

The article is saying Naira appreciation is basically a house built on sand.

Unless you are telling me that tinubu is running a productive economy .

Wow....serious insight

Hmmmm

kingsways:
With all due respect, this analyst is an enemy of progress.

Where were you when Naira depreciated from N400 at Buhari’s handover N1900

Naira strength has always been built on weak things like portfolio investors and oyel not on improved productivity and such like.

That means that any appreciation is a mirage unless government changes it's ways

This is nonsense, misleading heading...the op is talking about his own experience and selfish interest, not about the economy. Dumb post.

Low value of naira is why the government is borrowing money up and down, because we are not getting the right value from our resources and assets.

A strong naira gives more value to all our resources, human capital, services and products. A strong naira have no demerits.

Seun stop allowing such dumb, anti progress post on your forum, abi una be winch, una no like better thing?

If nairaland is now for dummies let us know.

I just tire for una in this country.If Naira depreciate WAHALA , If it appreciates WAHALA !!!. like what is the color of una demonic problem in this nation Abeg!!!

Appreciate what the government is doing and stop whining; for once the government in power has been able to stabilize our foreign exchange

With the way things are going if Dollar go 100naira thing wey feed on FX being sold by Vendor no go still come down...



Nigeria and dere Leader same blood flowing in Dem...

What kind of AI writing is this?

So no creativity in writing thoughtful post?

I'm not surprised at the person posting this.

givedemwotowoto:
More and more propaganda without governance

See the carefully worded Agbadorian scent below 👇🏾

You also didn't read that the naira appreciation is due to portfolio investors , not due to investments in productive things , which is basically stating that the appreciation of the naira is a mirage

Infact this is the main point of the article

The real danger of an appreciating naira is confusing excitement with endurance. A currency supported by production and exports has staying power. A currency supported mainly by interest rate differentials has mood swings

In other words,the naira appreciation is a mirage.

Oga sometimes it's good to actually read and understand things. The guy is actually blasting the apc government and tinubu. Unless you want to tell me that production is improving..lol.

nairalanda1:
Naira strength has always been built on weak things like portfolio investors and oyel not on improved productivity and such like.

That means that any appreciation is a mirage unless government changes it's ways

Obidenz. Una no go ever like peace and good news for una house hold. So, let such things flee from you all .

I totally understand why this point is coming from. Im a similar situation.
I bought a property recently with plan fo finalize payment in 12 months.
Now with naira appreciation, it's going to cost me more dollars than previously calculated. The seller is refusing to change the agreement.
I want Naira 5o appreciate but people bringing in dollars are not happy about this development.
Oh well, everyone with their own.
All in all, I hope the appreciation continues even though it's cost me more than anticipated.