The naira weakened to a two-month low against the dollar in the official foreign exchange (FX) market on Wednesday, despite rising market liquidity and growing external reserves, as increased demand for the greenback weighed on the local currency.
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. This represented a 0.68% decline from N1,370.64 recorded on Tuesday at the Nigerian Foreign Exchange Market (NFEM). The last time the naira traded at a comparable level was on April 28, 2026, when it closed at N1,380.71 per dollar.
Although NFEM deal volumes and turnover figures for Wednesday were unavailable at the time of reporting, market activity remained strong. The number of deals executed on Tuesday rose by 10.34% to 320, compared with 290 recorded on Monday.
Total turnover at the NFEM window also increased significantly to $660.25 million on Tuesday, representing a rise of 63.05%, or $255.31 million, from the $404.94 million recorded on Monday. The increase pointed to stronger foreign exchange supply and heightened trading activity within the market.
At the parallel market, commonly referred to as the black market, the naira closed at N1,400 per dollar, reflecting a N5 depreciation from the N1,395 quoted the previous day. Consequently, the gap between the official and parallel market exchange rates narrowed to N20 on Wednesday from N31 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 trend. Data published on the CBN website showed that reserves climbed to a 17-year high of $51.17 billion as of June 23, 2026. This represents an increase of 36.38%, or $13.65 billion, compared with the $37.52 billion recorded during the corresponding period in 2025.
The growth in reserves has been underpinned 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 this was lower than the $9.22 billion posted 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 eased 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 dropped sharply to $0.75 billion from $1.44 billion.
As a result, 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 figures compare 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% to N1,355.34 per dollar in February, compared with N1,416.52 per dollar in January. Similarly, the end-of-period NFEM rate improved to N1,363.40 per dollar from N1,386.55 per dollar recorded in the previous month.
However, despite the stronger exchange rate performance recorded during February, activity at the official market moderated. Average foreign exchange turnover at the NFEM declined by 10.29% to $527.17 million in February, down from $587.62 million recorded in January.