Nigeria’s FX Recovery: Is Market Stability Enough to Build Investor Trust?

Nigeria’s foreign-exchange market has improved, with stronger reserves, better price discovery and renewed foreign capital inflows. However, market improvement is not necessarily the same as lasting credibility. A recent assessment raises key questions about how much of the country’s reserves are readily usable during pressure, whether investors can bring in and repatriate funds without major barriers, and whether capital inflows are supporting long-term investment. Portfolio investment can signal confidence, but it differs from foreign direct investment in factories, infrastructure and other durable projects. The key issue is whether today’s FX stability can withstand a tougher global economic environment.

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