Naira Records Strongest Level Under EFEMS
Nigeria’s local currency, the naira, appreciated sharply on Monday to ₦1,452.79 per U.S. dollar in the official foreign exchange market – its highest level since the launch of the Electronic Foreign Exchange Matching System (EFEMS) in December 2024.
The current figure represents a ₦208.33 gain, or 14.3 percent appreciation, from the ₦1,661.12 level recorded when EFEMS first came into operation, marking a remarkable turnaround in the country’s foreign exchange landscape.
Financial analysts describe the latest development as a reflection of improved market transparency, increased foreign exchange inflows, and renewed investor confidence in the CBN’s reform agenda.
EFEMS Driving Transparency and Stability
The Electronic Foreign Exchange Matching System (EFEMS) was introduced by the Central Bank of Nigeria (CBN) to digitize and automate FX transactions. It matches buyers and sellers based on price and volume thereby reducing manual intervention, speculative trades, and arbitrary pricing.
Experts say the system has improved visibility in price discovery and enhanced accountability among market participants. As a result, the official FX market now attracts more legitimate inflows, especially from exporters, investors, and corporate entities.
FX Inflows Surge, Boosting the Naira
According to market reports, foreign exchange inflows rose to $1.37 billion in the latest trading week, up from $1.10 billion the previous week.
Foreign Portfolio Investors (FPIs) contributed over 33 percent of the inflows, while exporters and non-bank corporates added to the liquidity surge.
Nigeria’s external reserves also climbed slightly to $42.87 billion, reinforcing the country’s financial buffer and contributing to naira stability.
The gap between official and parallel market rates has narrowed to just ₦14.65, down from over ₦40 earlier this month a positive signal for market convergence.
What to Watch
The market now turns its attention to:
- Sustained CBN interventions to maintain FX liquidity
- Oil price stability and crude export earnings
- Further inflow from foreign investors and diaspora remittances
If these remain positive, analysts believe the naira could stabilize further, boosting business confidence and economic recovery heading into 2026.
