Naira Strengthens to Two-Year High Against Euro

The Nigerian naira has strengthened beyond the N1,500-to-the-euro mark for the first time since April 2024, according to the latest data from the Central Bank of Nigeria (CBN). The naira closed at N1,497 per euro, compared to N1,684 recorded late last year.

This appreciation marks a significant recovery from the period following the 2024 foreign exchange reforms and naira devaluation, when the exchange rate against the euro climbed as high as N1,800. The latest improvement is attributed to better domestic foreign exchange conditions and a weakening of the euro against the US dollar.

Analysts caution that the movement should not be seen as a broad-based appreciation of the naira. Jide Babalola, an economist and financial market analyst, noted that the euro-dollar cross-rate is a major factor. He explained, "If the euro weakens significantly against the dollar while the naira remains relatively stable against the dollar, the naira will automatically appreciate against the euro."

Babalola also pointed out that improved forex liquidity and recent CBN reforms have helped reduce speculative pressure on the naira. In the official market, the naira has remained relatively stable against the dollar, trading around N1,327-N1,330/$, while parallel-market rates have hovered between N1,370 and N1,390.