The naira ended the week slightly weaker against the dollar in the official foreign exchange (FX) market as turnover at the Nigerian Foreign Exchange Market (NFEM) declined by nearly 47 percent, despite improved external reserves.
Data published by the Central Bank of Nigeria (CBN) showed that the naira depreciated by N4.42 week-on-week, with the dollar quoted at N1,375.46 on Friday, compared to N1,371.04 recorded on Friday last week at the NFEM. This represents a 0.32 percent decline in the local currency’s value.
On a day-on-day basis, the naira weakened by N3.15 or 0.23 percent from N1,372.31 per dollar on Thursday. Over the five trading sessions, the local currency posted a marginal loss of N1.76 or 0.13 percent from N1,373.70 quoted on Monday at the start of the week.
Total turnover at the NFEM fell by 46.97 percent week-on-week to $1.77 billion for the four trading days to Thursday, according to available CBN data, down from $3.34 billion recorded the previous week. The number of deals executed at the NFEM window also declined from 1,341 last week to 1,128 as of Friday.
At the interbank segment of the FX market, however, trading activity improved slightly. The number of deals increased to 469 on Friday from 462 a week earlier, while total turnover rose by 11.65 percent week-on-week to $395.11 million from $383.46 million.
In the parallel market, also known as the black market, the naira appreciated slightly by N2 to close at N1,393 per dollar, compared to the opening rate of N1,395. The spread between the official and parallel market rates narrowed to N18 per dollar on Friday from N22 on Wednesday.
Nigeria’s external reserves, which provide the CBN with the capacity to support the naira, continued their upward trend in recent weeks. Reserves rose by $570 million to $48.89 billion as of May 21, 2026, representing a 1.18 percent increase from $48.32 billion recorded on May 7, according to data on the CBN website.
Olayemi Cardoso, governor of the CBN, speaking during the Monetary Policy Committee (MPC) briefing, said gross external reserves stood at $49.49 billion as of May 15, 2026, compared with $48.35 billion at the end of March 2026. He noted that the reserve level was sufficient to cover 9.04 months of imports of goods and services.
According to Cardoso, the strong reserve position continues to reinforce investor confidence in the Nigerian economy and support exchange rate stability.
During the week, the MPC of the CBN voted at the end of its 305th meeting to retain all key monetary policy parameters. The committee left the Monetary Policy Rate (MPR) unchanged at 26.5 percent, maintained the asymmetric corridor at +50/-450 basis points around the MPR, retained the Cash Reserve Ratio at 45 percent for deposit money banks and 16 percent for merchant banks, and kept the liquidity ratio at 30 percent.
Analysts said the decision reflects the apex bank’s effort to sustain investor confidence, preserve exchange rate stability, and avoid weakening foreign portfolio inflows at a time when major central banks, including the US Federal Reserve, the Bank of England, and the European Central Bank, continue to maintain tight monetary policies.
Bismarck Rewane, managing director of Financial Derivatives Company, said inflation could rise toward 16.5 percent in the coming months due to global tensions and elevated energy prices, but maintained that Nigeria’s macroeconomic position has improved significantly.
“Nigeria is in a stronger position to have a stable, predictable and well-managed exchange rate,” Rewane said on CNBC, citing stronger reserves, improved oil prices, and ongoing reforms implemented by the current administration and the Central Bank.