Naira Gains in Black Market Despite CBN's 350 Basis Point Rate Cut

The naira appreciated slightly in the parallel market on Wednesday despite the Central Bank of Nigeria cutting the Monetary Policy Rate by 350 basis points. The dollar was quoted at N1,385, compared with N1,390 previously, a gain of N5.

The gap between the official and parallel market rates narrowed slightly to N58, or 4.37 percent, on Wednesday from N61, or 4.59 percent, on Monday.

Official Market Posts Mild Gain

In the official FX market, the naira appreciated marginally by N2.02 to close at N1,327.78 on Tuesday. That was a gain of 0.15 percent from N1,329.80 quoted on Monday at the Nigerian Foreign Exchange Market, according to CBN data.

Liquidity conditions improved. Total turnover at the NFEM window jumped 107.02 percent to $694.58 million on Tuesday from $335.51 million on Monday. The number of deals rose to 367 on Tuesday from 290 on Monday, a 26.55 percent increase.

At the interbank segment, the number of deals increased by 27.45 percent to 130 on Tuesday from 102 on Monday. However, total turnover at the interbank segment declined by 14.81 percent to $99.17 million on Tuesday from $116.41 million on Monday.

Reserves Rise as Cardoso Cites 18-Year High

Nigeria's external reserves rose to $54.79 billion as of September 21, 2026. That was a 30.36 percent increase compared with $42.03 billion recorded on September 19, 2025, according to CBN data.

Olayemi Cardoso, governor of the CBN, said gross external reserves stood at $55.25 billion on September 18, 2026, the highest level in 18 years and sufficient to finance approximately 11.3 months of imports of goods and services.

Cardoso announced the outcome of the two-day Monetary Policy Committee meeting in Abuja on Tuesday. The committee decided to reset the MPR at 23 percent. It also recalibrated the Standing Facilities Corridor to +50/-300 basis points around the MPR and retained the Cash Reserve Requirement for Deposit Money Banks at 45 percent, Merchant Banks at 16 percent and non-TSA public sector deposits at 75 percent.

Analysts Warn on Portfolio Flows

Analysts said that despite the potential benefits of the rate cut to equities and the wider economy, the sharp reduction also creates risks for portfolio flows and the foreign-exchange market.

Muda Yusuf, chief executive officer of the Centre for the Promotion of Private Enterprise, said the divergence between Nigeria's monetary policy direction and tightening by some major central banks could affect interest-rate differentials and the relative attractiveness of naira-denominated financial assets. He said this could increase the risk of portfolio-flow reversals and renewed pressure on the foreign-exchange market.

However, the CPPE said Nigeria was entering the policy transition with stronger external buffers than in previous episodes of monetary easing, citing improved foreign reserves and greater stability in the foreign-exchange market.

For the naira, the parallel market gain and narrower gap offer short-term relief. But the rate cut and external policy divergence remain key risks for portfolio flows and FX stability.