Dollar crashes to N1,343.32 as naira hits five-month high on CBN reforms

The naira appreciated by about N9 against the US dollar on Tuesday, August 18, 2026, closing at N1,343.32 per dollar in the Nigerian Foreign Exchange Market. That is the strongest level in five months, with increased forex liquidity and Central Bank of Nigeria reforms driving the gain.

Data from the Nigerian Foreign Exchange Market showed the naira strengthened from N1,349.5372 recorded in the previous trading session. The latest movement underscores the impact of recent CBN measures to improve market liquidity and boost confidence in the currency.

What is driving the naira's rally

The CBN has continued to ease restrictions that previously limited banks and financial market operators from accessing Open Market Operations. This has given market participants more flexibility and helped ease pressure on the naira.

Nigeria's external reserves have also supported the currency. The CBN recently disclosed that reserves climbed to about $52 billion, their highest level in 17 years. This stronger buffer helps the country meet foreign exchange obligations and finance imports, while boosting investor confidence.

Inflation eases but food prices still bite

The naira's relative stability comes alongside a softer headline inflation rate. According to the National Bureau of Statistics, headline inflation eased to 15.43 per cent in July 2026. But food inflation moved in the opposite direction, rising to 20.31 per cent annually from 17.52 per cent in June.

The divergence shows that currency stability has not yet translated into lower food prices for households. Imported cost pressures remain, even as the broader inflation trend improves.

CBN's FX intervention in March

Separate CBN data showed the central bank sharply ramped up foreign exchange interventions in March 2026, selling $953.41 million to the market. That was the strongest central bank FX activity since April 2025.

Spot market transactions made up the bulk of the March sales, with $950.10 million channelled through that route and a further $3.31 million directed to Ministries, Departments and Agencies. The March figure was more than 16 times the $58.93 million sold in January and roughly 291 per cent above February's $244.13 million.

What it means for the naira and businesses

Analysts say sustained reserve accumulation, improved forex liquidity and greater transparency could help reduce volatility. For Nigerian businesses, a more stable exchange rate supports better planning, lowers imported cost pressures and strengthens investor confidence.

The key risk remains food inflation, which continues to squeeze household budgets. Unless improved forex conditions feed through to food prices, ordinary Nigerians may not feel the benefit of the naira's recent gains.