Analysts say the financial markets have reacted favorably to the Financial Action Task Force’s (FATF) decision to remove Nigeria from its grey list of nations with money laundering and terrorism financing threats, especially given the naira’s recent strong performance. The Nigeria Foreign Exchange Market (NFEM) statistics issued by the Central Bank of Nigeria (CBN) shows that as more dollar holders sell up their holdings, the naira closed the month at N1, 1422/$ after reaching a 10-month high of N1,444.42/$ at the official markets last Wednesday. Positive market sentiments and anticipated investment inflows into the domestic economy are attributed in large part to the recent CBN changes in the financial markets.Following Nigeria’s removal from the Financial Action Task Force’s (FATF) grey list last week, the naira is seeing significant increases. It is anticipated that the nation will see a surge in investment linked to increased corporate confidence and trust, facilitate the creation of foreign bank accounts for companies, and bolster the naira’s growing competitiveness in international markets for a number of stakeholders, particularly bank clients. The value of the naira has already increased significantly, reaching a record N1,465/$ on the parallel markets.Stronger external reserves and increased capital inflows have resulted from the local currency’s steady rise, which has been bolstered by better market liquidity and a revived sense of optimism about the economy. Compared to the N1,661.12 per dollar recorded in December 2024, when trading started on the Electronic Foreign Exchange Matching System (EFEMS), the naira position reflects a gain of N216.70, or over 15%. According to figures from the Central Bank of Nigeria (CBN), the value of the naira increased by 0.3% on a daily basis, rising from N1,448.20 per dollar on Tuesday to N1,444.42 on Wednesday. On October 28, 2025, gross foreign reserves also reached $43.10 billion, which greatly bolstered the local currency.”The announcement of the Financial Action Task Force on the Exit of Nigeria from its Grey list, also known as the Dirty money list, on Friday, October 24, 2025, as a result of Nigeria’s readiness to remediate their 40 recommendations has tremendously induced confidence and removed tension in the market,” stated Dr. Aminu Gwadabe, President of the Association of Bureaux De Change Operators of Nigeria (ABCON). He went on to say, “The impacts are reflected plausibly as the naira appreciates against dollars with N10/$.” The CBN had praised the announcement, as you may remember.The FATF spearheads international efforts to combat the financing of terrorism, money laundering, and proliferation. With support from the World Bank Group and the International Monetary Fund (IMF), the 40-member organization establishes global guidelines to guarantee that national law enforcement agencies may successfully pursue illicit finances associated with drug trafficking, the illegal arms trade, cyber fraud, and other severe crimes. Nigeria’s potential in the international financial markets was facilitated by her removal from the FATF gray list. The FATF spearheads international efforts to combat the financing of terrorism, money laundering, and proliferation. The Paris-based watchdog’s ruling is a significant step forward for Nigeria’s financial sector, which aims to boost credibility, lower capital costs, and win back investor trust. Burkina Faso, Mozambique, and South Africa are among the other nations that were taken off the list.By February 2025, the FATF had officially named 114 of the 139 nations and jurisdictions it has examined. According to the study, 86 of them have now addressed their AML/CFT shortcomings by implementing the required changes and have been kicked out of the process. AD SPONSOR How market confidence was boosted by exchange rate reforms It is believed that the Central Bank of Nigeria’s (CBN) forex reforms are having a significant positive impact by reducing forex speculation and closing the gap between the official and unofficial markets. In addition to lowering market distortions and preserving efficient foreign reserves management and accretions, the apex bank is increasing the amount of foreign exchange available to retail end users.Foreign investors’ interest in the domestic economy has increased as a result of the market’s increased liquidity and increased adherence to FX regulations, which have also lessened the naira’s fast depreciation on both official and black markets. Foreign Portfolio Investors’ (FPIs’) inflows, International Oil Companies’ (IOCs’) significant contributions, and the CBN’s actions against authorized dealers all contribute to the stability of the naira. According to market trading, speculative activity in the FX market has decreased, despite the naira’s continued strength.
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