Nigeria’s currency recorded a notable gain against the United States dollar on Wednesday, reaching its strongest level in nearly one month in the official foreign exchange market, as improved liquidity conditions and rising external reserves continued to support market stability.
Data released by the Central Bank of Nigeria (CBN) showed that the naira appreciated by N3.79 to close at N1,357.26 per dollar at the Nigerian Foreign Exchange Market (NFEM), compared with N1,361.05 recorded on Tuesday. The latest performance marks the local currency’s highest level since May 6, 2026, when it traded at N1,357.34 per dollar.
The appreciation reflects growing confidence in the foreign exchange market, supported by stronger dollar inflows and sustained efforts by monetary authorities to enhance market liquidity.
Although the CBN had yet to publish Wednesday’s total turnover and deal volume at the time of filing this report, earlier market data pointed to a slowdown in trading activity. Total turnover at the NFEM declined by 14.97 per cent to $676.43 million on Tuesday from $795.55 million recorded on Monday. Similarly, the number of completed deals fell to 376 from 392 during the same period.
Activity in the interbank foreign exchange segment also weakened further. The number of transactions dropped by 19.05 per cent to 136 deals on Wednesday, compared with 168 recorded a day earlier. Total turnover in the segment equally declined by 21.25 per cent, falling to $133.73 million from $169.82 million on Tuesday.
While the official market recorded gains, the parallel market moved in the opposite direction. The naira depreciated by N8 against the dollar, closing at N1,393 per dollar on Wednesday from N1,385 per dollar, a level it had maintained since the end of last week.
Despite the depreciation in the unofficial market, the spread between both exchange rates narrowed. The gap between the official and parallel market rates stood at N18 per dollar, compared with N24 per dollar recorded on Tuesday, indicating a gradual convergence of rates.
Analysts attribute the naira’s resilience in the official market largely to the continued improvement in Nigeria’s external reserves, which serve as a critical buffer for foreign exchange interventions and external payment obligations.
According to figures published by the apex bank, Nigeria’s external reserves rose by $1.55 billion within less than a month, increasing from $48.32 billion on May 7 to $49.87 billion as of June 2, 2026. The increase represents a growth of 3.2 per cent and pushes the country’s reserve position closer to the $50 billion threshold.
The steady rise in reserves has been fueled by stronger foreign exchange inflows into the economy. Recent data from the CBN revealed that Nigeria recorded a sharp increase in net foreign exchange inflows at the start of the year, helping to strengthen the naira and reinforce external buffers.
In January 2026, net foreign exchange inflows surged to $9.22 billion, more than three times the $3.11 billion recorded in December 2025. The development was driven by increased dollar supply, lower outflows, and improved participation across the foreign exchange market.
CBN figures showed that aggregate foreign exchange inflows rose by 45.24 per cent to $12.23 billion in January, up from $8.42 billion in December. At the same time, outflows moderated significantly, resulting in a stronger net inflow position for the economy.
A closer look at the data indicates that both official and autonomous sources contributed to the improvement. Foreign exchange inflows through the Central Bank increased to $4.66 billion from $3.69 billion in December, while autonomous inflows rose to $7.57 billion from $4.73 billion over the same period.
The improved inflow profile underscores growing participation by investors, exporters, and other market players, providing additional support for exchange rate stability and strengthening the country's foreign reserve position.
Market observers say sustaining these inflows and maintaining reserve growth will remain crucial in supporting the naira in the months ahead, particularly as demand for foreign exchange continues across key sectors of the economy.