Naira holds at N1,400 in black market, official rate hits 5-month high as FX turnover rises to $1.06bn

The naira traded flat in the black market on Friday morning at N1,400, losing N3 from Thursday's close of N1,397, even as official market turnover jumped to $1.06 billion. The gap between the official and parallel market rates widened to 4.63 percent on Friday, up from 4.41 percent on Thursday.

At the official window, the naira rose to a five-month high of N1,338.59 on Thursday, gaining N5 from N1,343.59 quoted on Wednesday at the Nigerian Foreign Exchange Market (NFEM).

FX turnover and reserves

Updated data from the Central Bank of Nigeria (CBN) showed total turnover at the NFEM window rose by 16.43 percent to $1.06 billion in a single trading day on Thursday, from $913.76 million recorded on Wednesday. However, the number of deals dropped by 11.27 percent, from 479 on Wednesday to 425 deals on Thursday.

Nigeria's external reserves, which give the CBN firepower to defend the naira and meet external obligations, climbed to an 18-year high of $53.31 billion as of August 27, 2026. That represents a 29.27 percent increase compared with $41.24 billion recorded in the same period of 2025.

Sectoral FX utilisation

According to the CBN's Quarterly Statistical Bulletin, foreign exchange utilisation across various sectors rose sharply by 74 percent year-on-year to $16.2 billion in Q1 2026. Analysts at Quest Merchant Bank Limited said the increase was broad-based, but mainly driven by a significant rise in FX utilisation for invisible transactions, which more than doubled to $11.4 billion from $4.5 billion a year earlier.

Invisible imports accounted for about 70 percent of total FX utilisation. The financial services sector remained the largest user, with FX utilisation rising 117 percent year-on-year to $9.0 billion, representing about 79 percent of total invisible transactions. Business services, the second-largest category within invisible transactions, rose to $1.2 billion from $223.6 million.

For visible imports, FX utilisation for merchandise goods remained broadly stable, rising 0.2 percent year-on-year to $4.9 billion. Industrial firms' FX utilisation declined 20 percent year-on-year to $1.8 billion. In contrast, utilisation for manufactured and transport products increased significantly, totalling $1.1 billion and $295.0 million respectively, from $477.9 million and $142.8 million in the previous year. Analysts said the increase partly reflects higher import costs from global supply chain disruptions and elevated input prices following the US-Iran conflict.

Outlook

Quest Merchant Bank analysts said the rise in sectoral FX utilisation reflects improved FX liquidity, supported by Nigeria's stronger external reserves. Looking ahead, they said: "We expect stronger FX utilisation across sectors, supported by the CBN's ongoing reforms and policy measures aimed at sustaining FX supply, deepening market liquidity and preserving confidence in the naira."

For the naira, sustained dollar supply and rising reserves suggest continued stability in the official market, while the black market premium remains under watch.