The naira has strengthened beyond a key N1,500-per-euro level, closing at N1,497/€ as the euro weakened sharply against the US dollar in global foreign exchange markets.
The latest rate marks the naira’s strongest position against the euro since April 2024, as the European currency fell to its weakest level against the dollar since May 2025.
According to the Central Bank of Nigeria (CBN) data cited in the latest market figures, the naira closed at N1,497 to the euro, breaking below the N1,500 mark for the first time in more than two years.
The development reflects both movements in Nigeria’s foreign exchange market and the euro’s performance against the dollar.
Euro falls to 17-month low
The euro came under renewed pressure on Monday, falling more than 0.8% to about $1.1161 in Asian trading before recovering slightly.
Reuters reported that the decline took the euro to its lowest level since May 2025, with concerns over France’s fiscal position and political uncertainty weighing on investor sentiment. The premium investors demand to hold French government bonds over German debt also widened to levels not seen since 2011.
The euro’s weakness has an important effect on the EUR/NGN exchange rate. Since the naira’s dollar exchange rate has remained relatively stable, a weaker euro against the dollar can translate into a stronger naira against the euro.
Naira steadies against dollar
The naira has traded within a relatively narrow range against the US dollar in the official market in recent weeks, according to the figures provided.
The currency has also benefited from the CBN's efforts to improve transparency and efficiency in the foreign exchange market.
The CBN’s Nigerian Foreign Exchange Market (NFEM) has been supported by reforms including the Electronic Foreign Exchange Matching System (EFEMS), which was introduced to improve transparency and provide real-time visibility of FX transactions. The CBN says the system is designed to promote market-driven pricing and reduce opportunities for market distortions and speculative activity.
The narrowing gap between official and parallel-market rates has also reduced opportunities for arbitrage and improved price discovery.
Naira gains after heavy depreciation
The latest movement marks a significant change from the sharp depreciation experienced after Nigeria’s major foreign exchange reforms in 2023 and 2024.
The EUR/NGN rate had risen above N1,500 per euro, reaching levels around N1,800 at its peak, before beginning a broader decline.
The pair has since fallen from levels around N1,684 per euro late last year to N1,497, according to the market data cited.
The improvement means Nigerians and businesses with euro-denominated obligations may face lower naira costs when purchasing euros, although the impact will vary depending on the applicable exchange rate and transaction costs.
What is driving the naira’s relative strength?
Several factors have been cited as supporting the naira, including improved foreign exchange market conditions, tighter monetary policy, and increased transparency in official FX trading.
Nigeria’s domestic refining capacity has also been highlighted as a potential source of relief for the country’s foreign exchange position. Increased domestic fuel production, particularly from the Dangote Refinery, can reduce the amount of foreign currency required to pay for imported petroleum products.
Improved export earnings and stronger foreign exchange inflows can similarly provide support for the currency.
However, the recent move against the euro should not be interpreted as a broad surge in the naira alone. The euro’s weakness against the dollar is a major part of the cross-rate movement.
Global factors weigh on euro
Investor concerns over France’s fiscal outlook and political environment have intensified pressure on the common currency.
Reuters reported that France’s 10-year borrowing costs had risen relative to Germany’s, with the spread moving above 150 basis points as investors assessed the country’s fiscal challenges and political uncertainty ahead of its 2027 presidential election.
The euro’s decline therefore provides an additional explanation for why the naira has moved below the N1,500 threshold against the European currency.
For Nigeria, the development could offer some relief to businesses and individuals who purchase goods, services or other assets priced in euros. At the same time, the sustainability of the naira’s gains will depend on domestic FX liquidity, foreign reserves, capital inflows, trade performance and developments in global currency markets.
Source: Central Bank of Nigeria FX data and Reuters global currency-market reporting.
Reference: Nairametrics