Nigeria’s sweeping economic reforms have earned strong commendation from the International Monetary Fund (IMF), with the global lender pointing to growing stability and signs of durable recovery in its latest Article IV Consultation report.

The IMF noted that recent policy reforms have helped restore macroeconomic stability, describing them as bold and necessary steps toward rebuilding investor confidence and strengthening the country’s financial system.

A key highlight of the reforms is the renewed independence of the Central Bank of Nigeria (CBN), which has significantly reduced its reliance on the controversial “Ways and Means” financing. According to the IMF, these advances have been cut by nearly 90 percent, marking a decisive end to deficit monetisation and reinforcing the foundation for inflation control.

The impact is already visible. Nigeria’s headline inflation, which previously surged above 40 percent, has dropped to 22.9 percent as of May 2025, reflecting the effectiveness of the CBN’s tight monetary policy stance.

The IMF also praised the country’s foreign exchange (FX) reforms, particularly the transition to a unified exchange rate system under a willing-buyer, willing-seller framework. This has improved liquidity, transparency, and price discovery in the FX market.

As a result, Nigeria recorded stronger foreign reserve growth, with reserves rising to $40.9 billion by the end of 2024, while FX inflows reached $6.9 billion in Q1 2025. The gap between official and parallel market rates has also narrowed significantly, falling from over 60 percent to below 3 percent, signalling improved market confidence.

In a further boost, Nigeria returned to the Eurobond market in January 2025 for the first time in four years, reflecting renewed investor confidence and increased portfolio inflows.

The IMF equally acknowledged ongoing reforms in the banking sector, including plans to increase banks’ minimum capital requirements by March 2026. The initiative is expected to strengthen financial institutions, improve credit access, and support long-term economic growth.

Efforts to expand financial inclusion, particularly through digital banking platforms and initiatives like the Women’s Financial Inclusion (Wi-Fi) programme, were also commended as part of broader structural reforms.

Despite the positive outlook, the IMF cautioned that challenges remain, including inflation pressures, infrastructure deficits, insecurity, and fiscal risks. It stressed the need for continued reforms in agriculture, energy supply, healthcare, and education to sustain growth.

“Recent reforms should help establish a strong foundation for sustained and inclusive growth,” the IMF noted, while calling for policy consistency and coordination in navigating global economic uncertainties.

Reacting to the report, CBN Governor Olayemi Cardoso said the assessment reinforces Nigeria’s progress toward restoring credibility and achieving long-term economic stability.

“This affirms that Nigeria is regaining credibility and laying the foundation for inclusive growth. It is also a reminder that discipline and vision remain essential,” Cardoso said.

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The naira recorded mixed performance across foreign exchange markets on Tuesday, appreciating in the parallel market while weakening at the official window, as the gap between both rates narrowed significantly.

At the parallel market, the local currency strengthened to N1,396 per dollar, improving from N1,400 per dollar recorded last Thursday, indicating a modest recovery driven by improved street-level dollar supply.

However, at the official Nigerian Foreign Exchange Market, the naira depreciated to N1,389 per dollar, reflecting continued pressure within the formal segment of the market.

Data released by the Central Bank of Nigeria (CBN) showed that the indicative exchange rate weakened from N1,382.75 per dollar last Thursday, representing a depreciation of N6.25 for the currency.

Despite the divergence in performance, the spread between the parallel and official exchange rates narrowed sharply to N5 per dollar, compared to N17.25 recorded in the previous week, suggesting improved alignment across the two markets.

Market data also indicated a slowdown in trading activity at the interbank window, with the number of deals dropping to 71, an 18 per cent decline from 87 transactions recorded in the previous trading session.

Analysts say the narrowing gap between both markets reflects ongoing efforts by monetary authorities to unify exchange rates and improve liquidity, although short-term volatility remains a key feature of the system.

They further note that sustained convergence will depend on consistent foreign exchange inflows, effective policy implementation, and continued confidence among investors and market participants.

The development underscores the delicate balancing act facing regulators as they attempt to stabilise the naira while deepening reforms in Nigeria’s foreign exchange market.

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The Nigerian currency, the , remained relatively stable against the on Friday, March 13, 2026, as the trading week closed with steady performance across official and parallel foreign exchange markets.

Market data from the (NFEM) shows the naira opened trading at ₦1,398.74 per dollar before slightly appreciating to ₦1,398.63 in early trading hours.

The marginal 0.01% gain reflects a period of calm in the currency market following moderate fluctuations earlier in the week.

CBN Policy Supports Market Stability

Analysts say the stability is partly due to the “willing-buyer, willing-seller” exchange rate framework implemented by the (CBN), which has helped balance demand and supply in the foreign exchange market.

The policy has also maintained the official weekly average exchange rate around ₦1,395 per dollar, providing businesses with a more predictable environment for international trade and financial planning.

Parallel Market Rates Remain Close

In the parallel or informal market, traders in cities such as , , and reported that the dollar is currently being exchanged between ₦1,405 and ₦1,415.

The gap between official and black-market rates has remained relatively narrow, estimated at about 1% to 1.2%, indicating improved liquidity and reduced speculative trading.

Key Factors Supporting the Naira

Several macroeconomic indicators are helping sustain the naira’s stability:

• Strong Foreign Reserves: Nigeria’s external reserves have surpassed $50 billion, providing a buffer for currency management.
• Lower Inflation: Headline inflation recently eased to 15.10%, boosting investor confidence in the economy.
• Energy Sector Reforms: Increased domestic refining capacity has reduced the demand for foreign exchange used for fuel imports.
• Stable Oil Production: Crude output remains steady at about 1.46 million barrels per day, supporting foreign currency inflows.

Outlook for Next Week

Financial analysts expect the naira to remain within the ₦1,395–₦1,405 range in the short term.

However, attention will shift to global economic developments, particularly signals from the , which could influence the strength of the dollar against emerging market currencies.

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