The naira continued its appreciation against the United States dollar at the foreign exchange market on Friday, driven by a slight rise in Nigeria's external reserves to $38.63 billion as of Thursday, July 24, 2025.
According to Central Bank of Nigeria data, the exchange rate stood at N1,534.72 against the dollar on Friday, compared to N1,534.79 on Thursday, indicating a slight strengthening of N0.07 on a day-to-day basis.
However, the parallel market showed a different trend, with the naira weakening marginally by N3 to N1,537 per dollar, down from N1,535 previously.
Foreign Reserves Show Positive Growth
The appreciation comes as Nigeria's external reserves increased to $38.63 billion on Thursday, July 24, up from $38.37 billion on Tuesday, July 22, 2025, showing a positive trajectory for the country's financial buffers.
On a week-on-week basis, BenriNews reports that the naira depreciated by N2.38 against the dollar, compared to N1,532.34 recorded the previous Friday, indicating some volatility despite the recent daily gains.
Expert Analysis on Naira Valuation
In a recent report, Renaissance Capital Africa estimated that the naira is overvalued by approximately 26 percent compared to its 25-year real effective exchange rate average, suggesting potential adjustments may still be necessary in the currency's valuation.
The slight appreciation of the naira in the official market, coupled with the growth in foreign reserves, may indicate improving investor confidence in Nigeria's economy, though challenges remain in achieving sustained stability in the foreign exchange market.
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