Naira steadies as external reserves surpass CBN target

The naira strengthened marginally across foreign exchange (FX) market segments on Monday as Nigeria’s external reserves exceeded the Central Bank of Nigeria’s (CBN) year-end target of $51.04 billion.

 

Data published by the CBN showed that the naira appreciated by N1.35 in the Nigerian Foreign Exchange Market (NFEM), with the dollar quoted at N1,369.11 on Monday compared to N1,370.46 on Friday.

 

Activity in the interbank FX market improved significantly. The number of deals executed rose by 59.32 percent to 94 on Monday from 59 recorded on Friday.

 

Interbank turnover also increased by 63.47 percent to $65.21 million, reflecting stronger market activity at the start of the week.

 

Although NFEM transaction data for Monday was not available at the time of reporting, market activity had slowed at the close of last week. NFEM deals declined to 201 on Friday from 253 recorded on Thursday, while turnover fell by 45.25 percent to $207.14 million from $378.34 million.

 

In the parallel market, also known as the black market, the naira gained N5 to close at N1,395 per dollar, representing a 0.4 percent appreciation from N1,400 recorded on Friday. Consequently, the spread between the official and parallel market exchange rates widened slightly to N31 on Monday from N30 at the close of trading last week.

 

Read also: Stock deals skyrocket 131% to N7.89trn as domestic, foreign appetite explodes Nigeria’s external reserves, which provide the CBN with the capacity to support the naira and meet external obligations, continued their upward trajectory, rising to $51.06 billion as of June 19, 2026.

 

The reserve level exceeded the apex bank’s target of $51.04 billion and represented a 32.62 percent increase compared to $38.50 billion recorded in the corresponding period of 2025.

 

Reflecting the stronger reserve position, analysts at Quest Merchant Bank noted that the naira delivered improved performance across both the official and parallel markets during the month.

 

According to the bank, the currency appreciated by 0.2 percent month-on-month in the official market to N1,372.00 per dollar and by 0.6 percent month-on-month in the parallel market to N1,390 per dollar.  

 

Across other major African economies monitored by the bank, reserve trends 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.

 

The decline was attributed to weaker gold valuation effects and higher external foreign exchange obligations.

 

By contrast, Egypt’s net international reserves maintained their upward momentum, increasing by $125 million month-on-month to $53.1 billion in May. The growth was supported by elevated domestic interest rates, which continued to attract foreign exchange inflows into the economy.

 

“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 added that 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. other major African economies monitored by the bank, reserve trends remained mixed.