Naira records gains on $1.98bn weekly FX turnover

The naira ended the week stronger against the dollar across the foreign exchange (FX) market segments, supported by improved market liquidity and a weekly turnover of $1.98 billion at the Nigerian Foreign Exchange Market (NFEM).

Data published by the Central Bank of Nigeria (CBN) showed that the naira appreciated by N13.55 week-on-week, with the dollar quoted at N1,361.39 on Friday, representing a 0.99 percent gain compared to N1,374.94 quoted the previous Friday at the NFEM window.

The NFEM recorded 1,485 deals valued at $1.98 billion during the week, while the interbank segment accounted for $571.72 million across 607 deals.

Despite the weekly gain, the local currency weakened slightly on a day-on-day basis, depreciating by N5.54 from N1,355.85 per dollar on Thursday, representing a 0.4 percent decline. However, for the five trading sessions, the naira still appreciated by N3.86 or 0.3 percent from N1,365.25 per dollar quoted on Monday.

At the parallel market, also known as the black market, the naira appreciated by N5 to close at N1,395 per dollar on Friday after holding relatively steady at N1,400 per dollar for most of the week. Consequently, the gap between the official and parallel market rates narrowed to N34 from N45 recorded on Thursday.

Nigeria’s gross external reserves, which provide the CBN with the buffer to support the naira, continued their gradual decline. Data published on the apex bank’s website showed that reserves fell by 3.39 percent to $48.32 billion as of May 7, 2026, from $50.02 billion recorded on March 11, 2026.

Analysts at Coronation Merchant Bank noted in a weekly report that the naira had weakened by 1.20 percent at the NFEM window in the previous week, closing at N1,374.94/$1 compared to N1,358.44/$1 in the preceding week. According to the bank, the weaker performance was largely driven by midweek pressure that saw the currency trade to an intraweek high of N1,379.46/$1 before recovering toward the close of trading.

“The parallel market recorded a flat performance, with the naira remaining at N1,400.00/$1. At current levels, the parallel market trades at a slight premium of 1.82 percent relative to the official NFEM rate,” Coronation Merchant Bank stated.

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In 2024, the CBN issued comprehensive guidelines for the operation of the interbank foreign exchange trading system through the Electronic Foreign Exchange Matching System (EFEMS), pegging the minimum tradable amount at $100,000 with incremental clip sizes of $50,000 to improve transparency, efficiency and price discovery in the FX market.

The apex bank said the EFEMS initiative was designed to ensure “transparent, fair, and efficient FX trading, minimise counterparty risks, and enforce compliance with CBN regulations.”

Speaking in November 2025, Olayemi Cardoso, governor of the CBN, said one of the clearest signs of renewed confidence in Nigeria’s economy was the transformation of the foreign exchange market following a series of reforms introduced by the apex bank.

“Over the past year, we have sustained the unification of the multiple exchange-rate windows,” Cardoso said.

He noted that the multi-billion-dollar FX backlog inherited by the bank had been fully cleared, helping to restore market credibility and improve business confidence.

According to him, the introduction of the Nigerian Foreign Exchange Code established clear rules around transparency, governance, ethics and fair dealing among authorised dealers, while the deployment of EFEMS, powered by Bloomberg BMatch, enhanced price discovery through mandatory order submission and real-time regulatory visibility.

Cardoso said the reforms had significantly reduced opacity and market manipulation, adding that the gap between the official and parallel market rates had narrowed to below 2 percent from over 60 percent previously.

He further disclosed that foreign capital inflows rose to $20.98 billion in the first 10 months of 2025, representing a 70 percent increase over total inflows recorded in 2024 and a 428 percent surge compared to the $3.9 billion recorded in 2023, reflecting renewed investor confidence in the Nigerian economy.

Hope Moses-Ashike

Hope Moses-Ashike is an Associate Editor, Banking and Finance, with more than a decade of experience reporting on Nigeria’s financial system and broader economy. She closely tracks market movements, monetary policy decisions, company disclosures, regulatory actions, economic indicators, and global developments, and interprets what they mean for businesses, investors, policymakers, and households. Her reporting helps readers understand complex issues such as inflation trends, foreign exchange market dynamics, interest rate decisions, bank performance, and investment risks. She also covers major international events and periodically travels to Washington, D.C., to report on the World Bank/IMF Spring and Annual Meetings. Her dedication to financial journalism has earned her multiple recognitions and invitations to high-level professional development programmes. She is an alumna of the International Visitors Leadership Programme (IVLP) in the United States and holds an Advanced Financial Journalism Certificate from the Press Association Training in London, UK. Her other notable achievements include completing the Lagos Business School CMC Programme, the Bloomberg Media Africa Initiative Programme, and a Master Class in Journalism at Rhodes University in South Africa.