Nigeria’s financial markets have reacted strongly to the country’s removal from the Financial Action Task Force (FATF) grey list, with the naira, external reserves, and investor confidence recording marked improvements.
Last Wednesday, the naira rose to a 10-month high of N1,444.42/$ at the official window, as more dollar holders liquidated their positions. Analysts attribute the renewed optimism to the Central Bank of Nigeria’s (CBN) ongoing financial market reforms, which are expected to catalyse foreign investment inflows and deepen confidence in the domestic economy.
The currency has also strengthened at the parallel market, trading at N1,465/$, reflecting sustained momentum following Nigeria’s exit from the FATF list of countries with elevated money-laundering and terrorism-financing risks.
Stakeholders say the development will enhance business trust, attract new investments, ease international transactions, and make it simpler for local businesses to open foreign bank accounts—factors expected to further bolster the naira’s competitiveness.
Improved market liquidity and rising capital inflows have supported the currency’s appreciation. Relative to its December 2024 EFEMS launch rate of N1,661.12/$, the naira has gained N216.70, or roughly 15 percent.
Day-on-day performance also showed a 0.3 percent gain, with the currency firming from N1,448.20/$ on Tuesday to N1,444.42/$ on Wednesday, according to CBN data.
Meanwhile, Nigeria’s gross external reserves climbed to $43.10 billion as of October 28, 2025—further reinforcing the positive trajectory.
President of the Association of Bureaux De Change Operators of Nigeria (ABCON), Dr. Aminu Gwadabe, described the FATF decision as a major confidence booster. He said the October 24 announcement eased tension in the market and supported the naira’s gains.
CBN Speaks on FATF Decision
CBN Governor, Olayemi Cardoso, welcomed the development, calling it a validation of Nigeria’s reform agenda.
“The FATF’s decision to remove Nigeria from the grey list is a strong affirmation of our reform trajectory and the growing integrity of our financial system,” he said. “Our priority now is to consolidate these gains by ensuring that compliance, innovation, and trust continue to reinforce financial stability and strengthen Nigeria’s global credibility.”
FATF, backed by the World Bank and the International Monetary Fund, sets global standards for fighting money laundering, terrorist financing, and proliferation financing. Its removal of Nigeria from the grey list signals improved compliance and a stronger financial regulatory environment.
The Paris-based organisation noted that Nigeria’s exit enhances its attractiveness to global investors and strengthens its financial system credibility. Other countries cleared alongside Nigeria include South Africa, Mozambique, and Burkina Faso.
According to FATF, “As of February 2025, the organisation has reviewed 139 countries and publicly identified 114. Of these, 86 have successfully addressed their AML/CFT deficiencies and been removed from the process.”
FATF flags countries with significant lapses in their frameworks for combating money laundering, terrorism financing, and proliferation financing, and supports them in implementing corrective reforms.
