Naira gains N18 against dollar as external reserves hit $52.52 billion

The naira rose by N18.09 week-on-week in the official market, closing at N1,362.09 per dollar on Friday, July 25, 2026. Nigeria's external reserves climbed to $52.52 billion as of July 17, providing roughly 11 months of import cover.

Nigeria's naira held firm against the US dollar this week, gaining ground in both the official and parallel markets even as the greenback strengthened globally. Analysts attribute the resilience to improved domestic liquidity, rising foreign reserves and sustained confidence in the Central Bank of Nigeria's (CBN) exchange rate reforms.

Official and parallel market performance

Data from the CBN showed the naira closed at N1,362.09 per dollar on Friday in the Nigerian Foreign Exchange Market (NFEM), up from N1,380.18 the previous Friday. That is a week-on-week improvement of N18.09, or 1.3 per cent. On the same day, the currency also edged up N5.67 against Thursday's close of N1,367.76.

In the parallel market, the naira closed at N1,407 per dollar, compared with N1,412 a week earlier. The naira's resilience stands out because it coincides with a period of broad dollar strength.

Global dollar strength and domestic factors

J.P. Morgan Global Research recently upgraded its dollar outlook, pointing to a more hawkish stance from the US Federal Reserve and continued strength in the American labour market. The dollar index hovered near a three-week high on Friday at around 101.3, partly driven by fresh tariff measures from US President Donald Trump that stoked global trade concerns. Analysts also cited rising geopolitical tensions involving the United States and Iran as a factor pushing investors towards the dollar as a safe-haven asset.

Several domestic factors have helped the naira resist the usual pressure that comes with a stronger dollar. Total turnover at the NFEM window surged by 119.9 per cent during the week to $4.2 billion on Thursday, up from $2.01 billion on Monday. Deal volumes also rose, climbing from 1,216 transactions to 1,348. In the interbank segment, turnover grew by 51.3 per cent to $1.43 billion on Friday from $944.16 million at the start of the week.

Reserves and expert views

Nigeria's external reserves have also played a significant role. CBN Governor Olayemi Cardoso, speaking after the Monetary Policy Committee meeting, said gross reserves reached $52.52 billion as of July 17, 2026, up from $50.47 billion at the end of May. He attributed the increase to oil-related tax receipts and third-party inflows. The reserves now cover about 11 months of imports, well above the internationally recommended three-month minimum.

Manpreet Gill, chief investment officer for Africa, Middle East and Europe at Standard Chartered, said the current dollar strength is largely temporary. 'Our view is that both of those factors should gradually fade. Assuming inflation continues to moderate, and there are no significant new shocks, we expect US bond yields to ease over time, reducing support for the dollar,' Gill said. He added that prolonged dollar strength raises import costs and discourages capital flows into emerging markets, while a more stable dollar would benefit currencies like the naira.

What this means for the naira

Analysts say the naira's near-term outlook will depend on whether the CBN's reforms hold, reserves continue to grow, and global conditions become more supportive. Sustained FX liquidity and rising reserves offer a buffer, but external risks from dollar strength and trade tensions remain. For Nigerian businesses and consumers, a stable naira helps moderate import costs and supports planning, but the gains will need to be defended with consistent policy.