The naira appreciated against the dollar across the foreign exchange (FX) market segments on Monday, supported by improved liquidity in the interbank market and rising external reserves.
Data published by the Central Bank of Nigeria (CBN) showed that the naira gained N6.46 against the dollar, with the greenback quoted at N1,366.79 on Monday, compared with N1,373.25 recorded on Friday at the Nigerian Foreign Exchange Market (NFEM) window. This represents an appreciation of 0.47 percent.
The local currency’s performance was driven by stronger liquidity conditions in the interbank market. Total turnover at the interbank segment rose significantly to $117.93 million on Monday from $78.84 million recorded on Friday. This represents an increase of $39.09 million, or 49.58 percent.
The number of transactions executed in the interbank market also increased substantially, rising by 49.09 percent to 164 deals on Monday from 110 deals recorded on Friday, reflecting stronger trading activity among market participants.
Data on total turnover and the number of deals at the NFEM window were not available as of the time of filing this report.
In the parallel market, commonly referred to as the black market, the naira remained unchanged at N1,385 per dollar. As a result, the gap between the official exchange rate and the parallel market rate widened to N19 on Monday, compared with N12 recorded on Friday.
Nigeria’s external reserves, which provide the CBN with the capacity to support the naira and meet external obligations, have continued to record steady growth. The reserves rose to $49.58 billion as of May 29, 2026, from $48.32 billion on May 7, 2026.
This represents an increase of $1.26 billion, or 2.6 percent, over the period, highlighting continued improvements in the country’s foreign exchange position.
According to a report by the Financial Markets Dealers Association (FMDA), the naira depreciated marginally in the Nigerian Foreign Exchange Market during May, despite total market turnover exceeding $8 billion for the month.
The report, however, noted that Nigeria’s external reserves increased by more than $1 billion within approximately three weeks as proceeds from earlier crude oil exports and elevated global oil prices continued to bolster the country’s reserve position.
FMDA explained that there is typically a lag between crude oil sales and the receipt of export earnings. As a result, the rise in oil prices witnessed earlier in the year is only now beginning to translate into stronger reserve accumulation and improved government revenues.
Olayemi Cardoso, governor of the CBN recently disclosed that the country’s gross external reserves stood at $49.49 billion as of May 15, 2026, compared with $48.35 billion recorded at the end of March 2026.
According to Cardoso, the reserve position was sufficient to cover 9.04 months of imports of goods and services, providing a strong buffer against external shocks and enhancing confidence in Nigeria’s foreign exchange market.
He noted that the robust reserve position continues to strengthen investor confidence in the Nigerian economy, support exchange rate stability, and reinforce the country’s ability to withstand external pressures.
The sustained growth in external reserves, combined with improved liquidity in the foreign exchange market, is expected to continue supporting the naira and boosting confidence among investors and market participants in the months ahead.