Naira Gains 7.94% in Nine Months as FX Liquidity and Reserves Climb

The naira has appreciated by 7.94 percent in the parallel market over nine months, closing at N1,380/$1 for buying and N1,385/$1 for selling, according to data collated from parallel market operators. That compares with N1,495/$1 quoted on January 14, 2026.

In the official market, the currency appreciated by N93.14 over the same period, with the dollar quoted at N1,326.52 on Friday. That is a 7.02 percent gain compared with the N1,419.66 quoted on January 13, 2026, based on the latest Central Bank of Nigeria (CBN) data.

Reserves Cross $54bn

Nigeria's external buffers rose 18.95 percent year-to-date to $54.41 billion as of September 2026, up from $45.74 billion on January 12, 2026, CBN data showed.

A report by Quest Merchant Bank Limited said FX liquidity conditions improved in August, with inflows through the Nigerian Autonomous Foreign Exchange Market (NAFEM) window rising 19 percent month-on-month to $5.2 billion. It was the second consecutive month of growth, and total inflows were up 54 percent year-on-year.

The improvement was broad-based, with stronger participation from both domestic and offshore sources.

Offshore and Local Inflows

Foreign inflows rose 29 percent month-on-month to $1.9 billion. Foreign portfolio investment, which made up the bulk of that, increased 32 percent month-on-month to $1.7 billion, helped by attractive carry trade opportunities amid elevated domestic yields.

Other foreign portfolio investment flows and inflows from foreign corporates rose 5 percent and 16 percent month-on-month to $136.5 million and $61.4 million respectively.

Local participants remained the dominant source of FX supply, accounting for about 64 percent of total inflows and rising 14 percent month-on-month to $3.3 billion. The CBN's continued market intervention also supported liquidity, with total FX sales unchanged at $1.4 billion during the month.

Export proceeds kept supporting domestic supply on the back of rising crude oil prices. Exporter inflows increased 30 percent month-on-month to $1.2 billion. Inflows from local corporates and individuals rose to $704.2 million and $34.3 million, from $579.5 million and $12.5 million in the previous month.

What It Means

The CBN's sustained market presence shows underlying FX demand pressures have not disappeared even as external inflows improve. Quest Merchant Bank expects inflows to hold up from both domestic and offshore participants, citing elevated domestic yields, rising crude oil prices and the CBN's reform measures aimed at boosting market confidence and deepening liquidity.