The naira continued to rise against the dollar at the official foreign exchange (FX) market on Thursday, supported by improving dollar liquidity and strengthening external reserves, despite lower market turnover.
Data released by the Central Bank of Nigeria (CBN) showed that the naira rose marginally by N1.87 while the dollar closed at N1,367.76 on Thursday, representing a rise of 0.14 percent from the N1,369.63 quoted at the Nigerian Foreign Exchange Market (NFEM) on Wednesday.
However, in the parallel market, also known as the black market, the local currency weakened by N7 to close at N1,407 per dollar on Thursday, 0.5 percent lower than the N1,400/$1 recorded on Wednesday. As a result, the spread between official and parallel market rates widened to 2.93 percent from 1.8 percent a day earlier.
Activity in the interbank segment of the foreign exchange market slowed, with overall turnover down 19.76 percent to $334.13 million on Thursday from $416.42 million on Wednesday. The number of trades also fell to 122 trades from 198 recorded a day earlier.
While NFEM turnover and trade data for Thursday was not available at the time of reporting, the market saw stronger trading activity earlier in the week. The number of trades in the NFEM window increased by 33.23 percent to 417 on July 22, 2026 from 313 trades on July 21. However, total turnover fell 24.06 percent to $1.2 billion from the $1.5 billion one-day transaction recorded the previous day.
Nigeria’s external reserves, which provide the CBN with the ability to support the naira and meet external obligations, continued its upward trajectory, rising to a 17-year high of $52.03 billion as of July 22, 2026. The reserves were 35.6 percent higher than the $38.37 billion recorded in the corresponding period in 2025, according to the CBN.
Analysts at Coronation Merchant Bank said the naira showed greater resilience than expected in the first half of 2026 despite increased global uncertainty. “The naira demonstrated remarkable resilience in the first half of 2026, exceeding our expectations despite heightened global uncertainty,” the bank said. He noted that while he had forecast the exchange rate to average N1,382/$ during the first half of the year and end the year at N1,456/$, the currency instead averaged about N1,365/$, supported by improved foreign exchange liquidity, strengthened external reserves, recovery in oil production and sustained foreign capital inflows.
Analysts added that while crude oil production remained weaker than expected for much of the first half before rising to around 1.74 million barrels per day in June, the impact on foreign exchange earnings was largely offset by higher global oil prices driven by geopolitical tensions in the Middle East.
- “The better-than-expected results reflect strong foreign portfolio inflows into the bond market, especially open market operations (OMO) securities, driven by elevated domestic interest rates and attractive real yields, as well as improved foreign exchange liquidity supported by sustained CBN interventions and stronger external reserves,” the report said.
Hope Moses-Ashique
Hope Moses-Ashike is a Deputy Banking and Finance Editor with over a decade of experience covering the Nigerian financial system and the broader economy. She closely monitors market movements, monetary policy decisions, company disclosures, regulatory actions, economic indicators and global events, and interprets what they mean for businesses, investors, policymakers and households. Her reports help readers understand complex issues such as inflation trends, foreign exchange market dynamics, interest rate decisions, bank performance and investment risks. She also covers major international events and periodically travels to Washington, D.C. to report on the spring and annual meetings of the World Bank and IMF. Her dedication to financial journalism has earned her numerous recognitions and invitations to high-level professional development programs. She is a graduate of the International Visitor Leadership Program (IVLP) in the US and holds an Advanced Certificate in Financial Journalism from Press Association training in London, UK. Her other notable achievements include completing the CMC program at Lagos Business School, the Bloomberg Media Africa Initiative and a journalism master class at Rhodes University in South Africa.
