Market News

The naira on Wednesday weakened to a two-month low against the dollar in the official foreign exchange (FX) market, despite rising market liquidity and growing external reserves, reflecting an increase in the demand for the greenback.

Data published by the Central Bank of Nigeria (CBN) showed that the naira depreciated by N9.44, with the dollar quoted at N1,380.08 on Wednesday, representing a 0.68 percent decline from N1,370.64 recorded on Tuesday at the Nigerian Foreign Exchange Market (NFEM).

The last time the naira traded at a similar level was on April 28, 2026, when it closed at N1,380.71 per dollar.

Although NFEM deals and turnover figures for Wednesday were not available at the time of reporting, market activity remained robust. The number of deals executed on Tuesday increased by 10.34 percent to 320 from 290 recorded on Monday.

Total turnover at the NFEM window also rose significantly to $660.25 million on Tuesday, representing an increase of 63.05 percent or $255.31 million compared to $404.94 million recorded on Monday, indicating stronger foreign exchange supply and trading activity.

In the parallel market, also known as the black market, the naira closed at N1,400 per dollar, representing a N5 depreciation from N1,395 quoted on the previous day.

As a result, the gap between the official and parallel market exchange rates narrowed to N20 on Wednesday from N31 per recorded on Monday.

Meanwhile, Nigeria’s external reserves, which provide the CBN with the capacity to support the naira and meet external obligations, continued their upward trajectory.

Data published on the CBN website showed that reserves rose to a 17-year high of $51.17 billion as of June 23, 2026. This represents an increase of 36.38 percent or $13.65 billion compared to $37.52 billion recorded during the corresponding period in 2025.

The strength in reserves has been supported by sustained foreign exchange inflows into the economy. According to the CBN’s Monthly Economic Report for February 2026, Nigeria recorded a net foreign exchange inflow of $6.92 billion during the month, although lower than the $9.22 billion recorded in January 2026.

Aggregate foreign exchange inflows declined to $9.43 billion in February from $12.23 billion in January, while total foreign exchange outflows also moderated to $2.50 billion from $3.01 billion in the preceding month.

Foreign exchange inflows through the CBN fell to $3.09 billion from $4.66 billion in January, while autonomous inflows declined to $6.34 billion from $7.57 billion. On the outflow side, transactions through the Bank increased to $1.75 billion from $1.57 billion, whereas autonomous outflows fell sharply to $0.75 billion from $1.44 billion.

Consequently, foreign exchange transactions through the CBN generated a net inflow of $1.34 billion, while autonomous sources contributed a larger net inflow of $5.58 billion. These compared with net inflows of $3.09 billion and $6.14 billion, respectively, recorded in January.

The report also showed that the naira strengthened during the review period. The average exchange rate appreciated by 4.51 percent to N1,355.34 per dollar in February from N1,416.52 per dollar in January.

Similarly, the end-of-period NFEM rate improved to N1,363.40 per dollar compared to N1,386.55 per dollar in the preceding month.

However, despite the improved exchange rate performance during February, activity at the official market moderated. Average foreign exchange turnover at the NFEM declined by 10.29 percent to $527.17 million in February from $587.62 million recorded in January.