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The last time the naira traded at a similar level was on April 22, 2026, when the dollar was quoted at N1,348.45 in the official market.

Read also: Naira ends week flat as reserves hit $52.25bn

In the parallel market, also known as the black market, the local currency strengthened to N1,410 on Monday, representing a 0.7 percent gain from the N1,420 quoted last week. The gap between the official and parallel market rates stood at 4.48 percent on Monday, compared with 4.64 percent on Friday.

The number of deals in the interbank segment of the FX market increased by 29.93 percent from 137 on Friday to 178 deals on Monday. Total turnover also surged by 265.86 percent to $437.53 million, the highest since July 22, 2026, compared with $119.59 million recorded on Friday.

Although NFEM figures for deals and turnover were not available as of the time of reporting, activities moderated during the previous trading session, as total turnover declined by 8.98 percent to $352.34 million on Friday from $387.09 million recorded on Thursday. The number of deals at the NFEM window, however, rose by 11.31 percent from 283 on Thursday to 315 deals on Friday.

Nigeria’s external reserves, which provide the CBN with the firepower to support the naira and meet external obligations, have maintained a steady growth trajectory, rising to $52.25 billion as of August 13, 2026, their highest level in 17 years. The level represents a 28.32 percent increase from the $40.72 billion recorded in the corresponding period of 2025.

The sustained accretion in reserves comes amid improved conditions in the FX market and growing efforts by the CBN to deepen liquidity and strengthen the transmission of monetary policy.

Ayodeji Ebo, chief executive officer of MDU Capital, said the naira’s appreciation to N1,349/$ may be partly linked to the revised discount-window rules, as they give banks greater liquidity flexibility and support confidence in the FX market. However, he said improved FX supply, stronger reserves and moderate demand had also contributed to the naira’s gains.

“It will be encouraging to see similar appreciation in the parallel market. Although the spread has narrowed, it remains significant, and further convergence would reduce arbitrage and strengthen confidence in the sustainability of the naira’s gains,” he said.

On Wednesday last week, the CBN, through a circular to banks, introduced a series of reforms aimed at improving the functioning of the financial markets. The measures include easing restrictions on Deposit Money Banks’ access to the discount window and Standing Lending Facility, resuming tenored repo operations across four to 90 days, and broadening eligible participants in the OMO market to include non-bank financial institutions, corporates and retail investors.

However, the regulator retained restrictions on banks’ participation in OMO auctions on the same day they accessed the discount window.

According to analysts at Quest Merchant Bank Limited, the reforms should improve market liquidity, strengthen monetary policy transmission and deepen participation in the fixed-income market.

“The reforms are likely to deepen activity across the money market and fixed-income markets while signalling growing confidence in FX market stability, reserve adequacy and overall market conditions,” the analysts said.

The reforms could also have implications for yields and investment returns. Broader investor participation in OMO securities could accelerate yield compression over time, potentially reducing treasury income opportunities for banks and moderating the carry attractiveness of naira assets.