The naira ended the week largely flat across the foreign exchange (FX) market segments amid strong dollar liquidity and growing external buffers.

Data published by the Central Bank of Nigeria (CBN) showed that the naira appreciated slightly by N2.53, as the dollar was quoted at N1,365.69 on Friday, compared with N1,368.22 quoted a week earlier at the Nigerian Foreign Exchange Market (NFEM).

On a day-on-day basis, however, the local currency weakened marginally by 81 kobo from N1,364.88 per dollar traded on Thursday. Over the five trading days, the naira weakened by 86 kobo from N1,364.83, the opening rate on Monday at the NFEM.

In the parallel market, also known as the black market, the naira gained 0.63 percent week-on-week to close at N1,424 on Friday, compared with N1,415 at the close of trading last Friday. Over the five trading days, however, the local currency depreciated by N12 from N1,412 on Monday.

The naira appreciated slightly by N1 on a day-on-day basis, compared with N1,425 quoted on Thursday. The gap between the official and parallel market rates widened to 4.3 percent from 3.67 percent on Tuesday.

Although NFEM figures for Friday’s deals and turnover were not available as of the time of reporting, market activity increased during the week, with total turnover rising to $2.79 billion on Thursday, representing a 61.27 percent increase from the $1.73 billion recorded on Thursday last week. The number of deals at the NFEM also increased by 15.47 percent, from 1,267 a week earlier to 1,463 on Thursday.

Total turnover at the interbank FX market segment surged by 124.3 percent to $919.91 million on Friday, compared with $410.07 million recorded on Friday last week. The number of deals also jumped by 31.21 percent, from 487 on Friday last week to 639 this week.

Nigeria’s external reserves, which give the CBN the firepower to defend the naira and meet external obligations, have maintained a steady growth trajectory, rising to a 17-year high of $52.03 billion as of August 6, 2026.

The reserves represented a 30.11 percent increase from the $39.99 billion recorded in the corresponding period of 2025, according to data published on the CBN website.

Bismarck Rewane, managing director and chief executive officer of Financial Derivatives Company Limited, said the naira was currently signalling stability rather than crisis, although he expected some depreciation in the coming months.

Speaking at a Lagos Business School breakfast session, Rewane projected that the naira could trade between N1,400 and N1,450 per dollar over the next two months.

He attributed the expected stability to increased inward investment, a surplus current account, rising gross external reserves and the banking sector’s sizeable positive net foreign-asset position.

He also said the CBN was expected to intervene occasionally to counter speculative activities in the FX market, while describing the naira as currently undervalued.

According to data from FMDQ, FX inflows into the foreign exchange market increased by 59 percent month-on-month to $4.4 billion in July 2026, marking a strong rebound from the slowdown recorded in the previous month.

Analysts at Quest Merchant Bank said domestic inflows, which became the dominant source of FX liquidity in the market, were the primary driver of the monthly increase. In aggregate, inflows from domestic sources more than doubled to $2.9 billion in July, from $1.3 billion in June.

Within this segment, the CBN accounted for the largest share, with FX sales totalling $1.4 billion, a significant increase from the estimated $320 million recorded in June.

“We anticipate domestic sources to play a more prominent role in underpinning market liquidity and preserving exchange rate stability, supported by a stronger reserves position,” the analysts said.

Add as a preferred source on Google Follow on Google News

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.