Nigeria's foreign exchange market opened the week on a positive note, with the naira posting marginal gains across both the official and parallel market segments amid a continued rise in the country's external reserves.
Fresh data released by the Central Bank of Nigeria (CBN) showed that the nation's external reserves climbed to $51.06 billion as of June 19, 2026, exceeding the apex bank's year-end target of $51.04 billion. The reserve position also marked a significant 32.62 percent increase from the $38.50 billion recorded during the corresponding period in 2025.
The stronger reserve position provided additional support for the local currency, which appreciated slightly in the Nigerian Foreign Exchange Market (NFEM) on Monday.
At the official market, the naira gained N1.35 against the United States dollar, closing at N1,369.11/$ compared to N1,370.46/$ recorded on Friday.
Market activity also witnessed a notable improvement. Data from the interbank foreign exchange market indicated that the number of transactions executed rose sharply by 59.32 percent, increasing from 59 deals on Friday to 94 deals on Monday.
Similarly, turnover in the interbank market surged by 63.47 percent, reaching $65.21 million, a development that reflected stronger trading activity and improved liquidity conditions at the start of the trading week.
Despite the improved start to the week, data from the previous trading session showed that activity in the NFEM had slowed considerably. The number of deals declined to 201 on Friday from 253 on Thursday, while turnover fell by 45.25 percent to $207.14 million, down from $378.34 million recorded a day earlier.
In the parallel market, commonly referred to as the black market, the naira also strengthened. The local currency appreciated by N5 to close at N1,395 per dollar on Monday, compared to N1,400 per dollar at the end of trading on Friday.
The development represented a 0.4 percent appreciation in the unofficial market. Consequently, the gap between the official and parallel market exchange rates widened slightly to N31 per dollar, up from N30 per dollar recorded at the close of last week.
Analysts say the continued accumulation of external reserves is enhancing the CBN's capacity to support the naira, meet external obligations and sustain confidence in the foreign exchange market.
Reflecting on recent market trends, analysts at Quest Merchant Bank noted that the naira had delivered a stronger performance across both the official and parallel markets during the month.
According to the bank, the local currency appreciated by 0.2 percent month-on-month in the official market to N1,372 per dollar, while gaining 0.6 percent month-on-month in the parallel market to N1,390 per dollar.
The bank attributed the improved performance largely to stronger foreign exchange liquidity and a more favourable reserve position.
Across Africa's major economies, however, reserve performance remained mixed.
In South Africa, the country's international liquidity position—a broader measure of external reserves—declined by $29 million month-on-month to $73.5 billion. Analysts linked the decline to weaker gold valuation effects and rising external foreign exchange obligations.
Egypt, on the other hand, continued to record steady reserve growth. The country's net international reserves increased by $25 million month-on-month to $53.1 billion in May, supported by elevated domestic interest rates that continued to attract foreign exchange inflows.
Looking ahead, Quest Merchant Bank expressed optimism about Nigeria's reserve outlook and the prospects for exchange rate stability.
“Looking ahead, we expect continued accretion to external reserves, driven by stronger export inflows amid elevated global oil prices and sustained offshore inflows supported by compelling yield opportunities,” analysts at Quest Merchant Bank said.
The analysts further noted that rising reserves, improving foreign exchange liquidity and sustained foreign capital inflows are expected to provide additional support for the naira in the near term.
“The combination of rising reserves, improving FX liquidity and sustained foreign capital inflows should continue to provide support for exchange rate stability in the near term,” the bank added.
The latest developments suggest that Nigeria's foreign exchange market may continue to benefit from stronger reserve buffers and improving investor confidence, factors that could help sustain relative stability in the value of the naira in the months ahead.