The Nigerian naira gained ground against the euro in Thursday’s trading, closing at ₦1,606/€1, an improvement from Wednesday’s ₦1,644/€1, according to Central Bank of Nigeria (CBN) data.

Analysts noted that bullish sentiment around the naira helped ease pressure on the EUR/NGN rate, reflecting stronger demand for the local currency.

The naira’s recent appreciation against both the euro and the U.S. dollar has been linked to improved foreign exchange inflows, fiscal reforms, trade surpluses, and stronger external reserves. Nigeria’s reserves currently stand at about $46.7 billion, giving the CBN greater capacity to defend the currency and meet market demand.

Despite this momentum, the CBN has remained cautious with monetary policy, cutting its benchmark rate only once in 2025 and holding it at 27%. High interest rates have helped attract foreign portfolio investors while keeping inflation in check after the 28-year peak recorded in late 2024.

Nigeria’s trade relationship with the European Union has also supported the naira. In 2025, the country posted a $10 billion trade surplus with the EU, driven largely by exports of crude oil, gas, and cocoa. Key trading partners include Germany, the Netherlands, Belgium, France, and Spain.

Meanwhile, the euro faces headwinds within the Eurozone. Inflation has dropped to 1.7%, below the European Central Bank’s 2% target, fueling speculation of future rate cuts. Economic growth is projected at just 1.2% in 2026, limiting the euro’s strength and providing room for the naira to advance.

European leaders, including French President Emmanuel Macron, are expected to discuss the euro’s competitiveness at the upcoming EU summit, while U.S. President Donald Trump’s remarks on the dollar’s weakness have added volatility to the euro-dollar exchange rate.