Naira holds steady as FX market turnover hits $46.4 billion in four months

Nigeria's foreign exchange market recorded $46.37 billion in combined turnover between March and June 2026, driven by activity under the Nigeria Foreign Exchange Market (NFEM) framework. The naira depreciated only marginally at the official window, closing at N1,379.68 per dollar by the end of June.

Breakdown of turnover and transactions

Data published by the Central Bank of Nigeria (CBN) showed that the NFEM window contributed $38.61 billion to the total, while interbank transactions accounted for the remaining $7.76 billion. Deal volumes were equally significant, with 22,282 transactions executed through the NFEM compared with 8,021 in the interbank segment over the same period.

Exchange rate movement remains contained

At the official market, the naira closed June at N1,379.68 per dollar, a marginal slide of N1.66 from the N1,378.02 rate recorded at the start of March. In the parallel market, the currency lost N22 over the four months, closing at N1,397 per dollar in June from N1,375 in March. Notably, the gap between official and parallel market rates narrowed sharply, reducing the arbitrage opportunities that had plagued the market ahead of the CBN's reform programme.

Analysts at Quest Merchant Bank said the naira came under mild pressure in June, closing at N1,379 per dollar, a 0.3% monthly decline from N1,376 in May. The bank attributed this to a 26% month-on-month drop in total foreign exchange supply to $2.8 billion, as inflows from both domestic and foreign participants moderated.

Liquidity squeeze and CBN intervention

Quest Merchant Bank further disclosed that a $1.3 billion Open Market Operations private placement matured during June and was not rolled over, triggering a significant outflow that tightened dollar liquidity. The parallel market felt the strain too, with the naira depreciating 1.1% month-on-month to N1,405 per dollar amid sustained demand and constrained supply outside the official market, BusinessDay reports.

To cushion the liquidity squeeze, the CBN injected $320 million into the market. The intervention proved effective in containing volatility, with the naira recording an average appreciation to N1,368.14 per dollar from N1,370.16 the previous month.

Outlook and market reforms

Looking ahead, Quest Merchant Bank analysts said they expect the naira to trade within a relatively narrow band, supported by sustained liquidity and strong external reserve buffers. The analysts noted: 'However, we anticipate persistent demand pressures to remain elevated, underpinned by Nigeria's structural demand for foreign exchange.'

The market's improved performance follows revised NFEM operational guidelines issued by the CBN in November 2024, which consolidated all official foreign exchange windows and introduced stricter governance requirements, including annual attestation to the Nigeria FX Code of Ethics by bank boards and chief executives.

Earlier, Legit.ng reported that Nigeria's currency, the naira, ranked as the second-best performing currency in Africa during the first half of 2026, defying a difficult economic environment that saw most currencies across the continent lose value against the US dollar. According to data compiled by real-time trading platform African Markets, only four of the 17 major African currencies tracked appreciated between January and the end of June, while 13 depreciated.

For Nigerian businesses and consumers, the narrowing gap between official and parallel market rates signals improved market transparency and reduced currency risk, which could support more predictable pricing for imported goods and services.