Naira strengthens as official-BDC rate gap falls below 2%
By Aboki Forex —
The Central Bank of Nigeria says the gap between the official exchange rate and Bureau de Change rates has narrowed to less than two per cent. This signals improving stability in the currency market and growing confidence in reforms introduced since 2023.
CBN Governor Olayemi Cardoso disclosed this at the CBN Fair in Gombe, represented by Hakama Sidi-Ali, Acting Director of Corporate Communications and Investor Relations. Cardoso said the naira had continued to strengthen as reforms aimed at improving transparency and efficiency in the foreign exchange market began to produce results.
“The naira continues to strengthen, with the spread between official and Bureau de Change rates now below two per cent,” he said.
Rate movement and reserves
Latest CBN data showed the naira appreciated slightly to N1,364/$ on Friday, August 7, 2026, compared with N1,365/$ on Thursday. Cardoso attributed the narrowing gap to tighter monetary policy, foreign exchange reforms and measures designed to improve transparency in the market.
He also highlighted growth in external reserves, saying they had risen above $52.5 billion, supported by sustained foreign exchange inflows and improving investor confidence. Although reserves have moderated slightly from recent highs, CBN data show they remain above June levels.
Reserves stood at about $52.04 billion on July 23 before declining to approximately $51.92 billion by July 29. Despite the recent movement, the figure remained higher than the $51.46 billion recorded at the end of June, representing an increase of about $463 million. Reserves had climbed steadily from $49.80 billion at the beginning of June to $51.04 billion by June 18 and $51.46 billion by June 30.
Reforms and policy decisions
The CBN governor said the bank had implemented several reforms over the past 34 months to promote sustainable economic growth, create jobs and reduce poverty. Among the measures are the unification of the foreign exchange market, banking sector recapitalisation, the Non-Resident Bank Verification Number (NRBVN), the B-Match foreign exchange trading system and the Nigeria Payments System Vision 2028.
The apex bank has also introduced the Nigerian Overnight Financing Rate in collaboration with the Financial Markets Dealers Association. According to Cardoso, the benchmark will provide a transparent, market-based reference for short-term funding transactions and bring Nigeria's money market closer to international standards.
The Monetary Policy Committee, at its 306th meeting held on July 20 and 21, retained the Monetary Policy Rate at 26.5 per cent. The committee also kept the Cash Reserve Ratio at 45 per cent for commercial banks and 16 per cent for merchant banks. It maintained the Standing Facilities Corridor at +50/-450 basis points around the MPR and retained the CRR on non-Treasury Single Account public-sector deposits at 75 per cent.
Outreach and market implications
CBN Branch Controller in Gombe, Yunusa Buba-Mubi, said the CBN Fair was designed to improve public understanding of the bank's policies while giving Nigerians and other stakeholders an opportunity to provide feedback.
The narrowing difference between official and BDC rates is significant because a wide gap between the two markets has historically contributed to uncertainty for businesses, investors and consumers. With the gap now below two per cent, the CBN's reforms appear to be gaining traction, though a sharp 50% decline in overall trading activity previously noted by the central bank still raises questions about the market's health and participation.